Prospectus of the Reconciliation of Individual Liberty and Collective Welfare

Considerations to inform a more cogent economic philosophy.

Prefatory Comments on the Semantics, Intentions, and Method of the Discourse

Much of the evolution of our economic regimes over the last few centuries, and particularly during the twentieth century, can be understood as a dialogue between the values of individual economic liberty and collective economic welfare. These values are often embodied in policies and ideologies in such ways that present them as inherently antagonistic to one another, but such is not necessarily the case.

Indeed, one could meaningfully interpret the great geopolitical conflicts of the twentieth century as a contention between an economic order prioritizing individual economic liberty, namely liberal democracy, and the orders prioritizing collective economic welfare, namely the various forms of statist collectivism such as communism and national socialism. In choosing to understand this portion of our history this way, namely in a dialectical fashion, one can argue that liberal democracy erred too far in the interest of the individual, entailing widening economic disparities, whereas communism and national socialism erred too far in the interest of collective, entailing a suppression of pluralistic individual autonomy. 

This discourse aims to provide a conceptual framework for understanding how the values of individual economic liberty can be reconciled with the values of collective economic welfare, and to set the stage for some more distilled and cogent discourse to follow. Toward this aim, a certain degree of terminological clarification is warranted, as well as an explanation of the epistemological approach taken toward constructing such a framework. Cursory definitions will be provided for the following terms: individualism, collectivism, progressivism, liberalism, market fundamentalism, and capitalism.

The terms ‘individualism’ and ‘collectivism’ are here understood largely in distinction from one another, where individualism refers to the set of values, economic or otherwise, pertaining more to individual interests, whereas collectivism pertains more to the interests of the collective in which the individual is a member.

Individualism, in the economic sense, is commonly associated with the freedom to conduct one’s own economic activities and business enterprises, relatively free from the coercion of some sovereign or collective state entity. Individualism here is understood in the foregoing sense, and not in the pejorative sense in which it refers to selfish behavior. Indeed, individualism so understood is arguably the basis of the western trends of the enlightenment and the industrial revolution, insofar as the individual became empowered, as an autonomous agent, to engage in free trade and pursue knowledge in manners relatively unencumbered by dogma. 

The term ‘liberalism’ is understood in its classical economic sense, referring to economies where the state or governing authority exercises minimal intervention in market dynamics, and instead allows competitive markets to shape the economy at large. It is worth noting that the term ‘economic liberty’ is not interpreted as freedom from want, as it is understood from a collectivist perspective, but rather as the freedom to make economic decisions, as it is understood from a classical perspective. That is, the freedom to create businesses, develop products, and set prices in a competitive fashion, rather than in a fashion entirely prescribed by a central institution planning the economy.

The term ‘market fundamentalism’ is here used to refer to a set of values and mode of logic whereby markets are treated as the ultimate determinant of the general welfare of society. Some degree of market fundamentalism tends to undergird liberalism in general, but this degree varies, as will be addressed later.

The term ‘capitalism’ thankfully will not be used as heavily in this discourse, but it will be interpreted as shorthand for an industrialized liberal political-economic order wherein companies and individuals practice the profitable deployment of capital. The term ‘capital’ is taken in its classical sense, namely that portion of a person’s wealth which that person uses to generate revenue, as opposed to that portion of a person’s wealth which is consumed or otherwise spent in consumptive fashion.

The term ‘collectivism’ is taken to refer to a class of ideologies and value systems in which the interests of the collective are widely prioritized over those of the individual. This term can run the spectrum from the more totalitarian forms of collectivism, where individual opinions and pursuits can be suppressed by state institutions, to the more moderate forms of collectivism, which are concerned with protecting basic interests of the collective, such as the democratic rule of law and certain social welfare provisions. 

The term ‘progressivism’ is here understood as a set of values concerned with the advancement of human welfare and, at least lately, the promotion of greater equitability across demographic disparities and the empowerment of historically disenfranchised communities. While progressivism is not necessarily a form of collectivism, it often involves collectivistic means, such as certain state programs, toward its desired ends.

While certain collectivistic means employed toward progressive ends can render progressivism incompatible with liberalism, progressive ends can also be pursued by means more amenable to the values of liberalism. Indeed, the conceptualization of such means is a chief aim of this discourse. Before that, however, a word is warranted on the epistemological nature of this discourse, to prevent the risk of my discursive methodology confusing the reader. 

The mode of this discourse can be understood as a sort of auto-discourse, insofar as the discourse is not only about its topic of choice, but also about the development of the author’s understanding of said topic, the methods employed to aid such development, and how the reader may choose to emulate said methods. 

The term ‘rhizome’ is a concept taken from post-structural continental philosophy, referring to an epistemological approach where, instead of attempting to distill everything down into a single absolute understanding, a plurality of possible understandings are advanced, accommodating an assortment of perspectives. The discourse itself can be understood as a rhizomatic prospectus, tasked with laying out a variety of related lines of inquiry jointly geared around the unifying topic, namely the balancing of individual economic liberty with collective economic welfare. The reasoning here is twofold: firstly, that the subject matter at hand involves a number of conflicting value systems which may each suffer disservice if a monolithic discursive approach is taken; and secondly, that proper liberalism is fundamentally a pluralistic regime insofar as it empowers individuals to pursue their varied interests, rather than conform to some authoritarian set of values.

The term ‘prospectus’ merely designates an exploratory and prognostic mode of discourse, in which solutions are worked towards and suggested for consideration, rather than definitively prescribed. That is to say, this discourse is chiefly tasked with aiding the reader in their own sensemaking efforts regarding the reconciliation of individual economic liberty with collective economic welfare. Given the complex, multifaceted, and often terminologically ambiguous nature of the subject matter, the reader may benefit from a discursive approach which presents solutions in provisional and circumstantially qualified capacities, rather than in absolute capacities. It is also worth noting that this discourse is intended to resonate with readers from a variety of ideological perspectives, indeed socialists and capitalists alike, which is arguably the primary forcing function justifying this otherwise byzantine format.

The Manner in which the Neoliberal Order Appears to have Diverged from a Pure Conception of Neoliberalism, and a Thoroughgoing Denunciation of the Whole Shebang

What is perhaps most fundamentally important in understanding neoliberalism is the distinction between its intellectual basis and its reality as a globalized political economy, and the manner in which the former has diverged from the latter over the course of the twentieth century. 

Intellectually, neoliberalism is a return to classical liberal economics, or ‘liberalism’ in the classical economic sense. In order to understand neoliberalism, and how it constitutes a novel intellectual and political regime, we must first address liberalism. While the history of markets and their structure is much older, the origins of liberalism proper are mostly associated with 18th century economic thinkers such as Adam Smith. The primary thesis of liberalism is that markets, when left alone by sovereign powers, naturally tend toward arrangements in which the general prosperity of the people is best promoted.

This notion that markets should be “disembedded” from their local political contexts, and should operate independently from the sovereign powers who would otherwise control them, is what distinguished liberalism from the prior feudal economic orders. Here it should be noted that there exists a certain potential for fallacy in this thinking, namely this tacit assumption that markets can naturally emerge without conscious technical and managerial efforts of particular individuals and bodies of individuals, whether that be the organization of faires, or the development of stock exchange software (Peters, 2021, Excerpt 1). 

Placing this fallacy aside, while the premise of liberalism has generally panned out successfully, in terms of the general advancement of prosperity among nations which have adopted such economic modes, this prosperity has been accompanied by considerable wealth disparities. This phenomenon can be considered the grounds for the primary line of argument against liberalism, namely that liberal economic orders, as such, tend to be indifferent to the welfare of the weak and disenfranchised.

Because liberal economic orders involve varying degrees of market fundamentalism, and because markets are more defined by commercial efficiency than by empathy, liberalism tends to be more optimized around letting individuals exercise economic autonomy than around ensuring the welfare of these individuals. To extend the criticism of liberalism, one may argue that economic liberty, namely the freedom to engage in business as one wills and not according to comprehensive commercial mandates issued by governments or sovereigns, is relatively moot when economic security is lacking. That is, if one lacks basic resources necessary to subsist, the full breadth of the value of economic liberty cannot be enjoyed.

Nonetheless, the central argument for liberalism, namely that the individual freedom to participate in competitive markets enables greater economic efficiency and prosperity than if the economy was centrally planned, remains strong, provided it does not extend too extremely toward the end of market fundamentalism. Given that the primary tenet of liberalism is the enablement of competition to shape markets, the absence of proper regulation entails the potential for monopoly, cartels, and other forms of market capture which compromise said liberty. In other words, at the precipice of market capture, laissez-faire is illiberal. Insufficient regulation can also entail the potential for markets to destabilize and ramify ruin across economies, often without sufficient institutional recourse to hold perpetrators accountable. Such was one of the primary contributing factors to the rise of radical collectivism in the early twentieth century, which can be considered a response to the increasingly hegemonic order of liberalism.

Indeed I do not find it unreasonable to frame the Wall Street market crash of 1929 as an example of the excesses of liberalism, particularly as an instance of the potential for minimally regulated and volatile markets to destabilize and externalize losses. By extension it may be asserted that the ensuing global depression, and the perceived correctives of authoritarian collectivism resulting therefrom, are consequences of said excess. That is, the excesses of liberalism, specifically the poor regulatory circumstances of the crash, created the global conditions whereby radically collectivistic political platforms, promising economic security and stability, seemed appealing. Appealing enough, indeed, to justify violent degrees of nationalism and state coercion over individual autonomy. Markets and even entire economies were collectivized and nationalized, in stark distinction to the sort of liberalism which these collectivist orders vehemently opposed in reality and in rhetoric.

Even the United States saw a turn toward more collectivist policy, albeit of a much milder form, in the era of policy ensuing the depression. Due to probably a number of reasons, including the relatively libertarian ethos of the United States and the fact that wartime economy enabled faster economic recovery than those nations more directly impacted by the wars, this turn toward collectivism nonetheless constituted an internal response to the aforementioned market crash. For example, the Securities and Exchange Commission was created as part of the New Deal to help regulate financial markets. This policy framework shift, away from the laissez-faire attitude and market fundamentalism of classical liberalism and toward the strengthening of social and institutional control over certain markets, would later become known as “embedded liberalism” and was largely informed by the economic theories of John Maynard Keynes.

It should be noted that there existed certain collectivistic and progressive trends which preempted the global depression, such the Progressive Era in the United States and the Bismarckian welfare state in the German Empire. What is arguably different here is that the major collectivistic trends of the early to mid twentieth century, namely communism and fascism, can be understood as world-historical responses to the growing hegemony of liberalism. To be sure, one can extend this logic of world-historical dialogues quite far, but beyond a certain point this historicist framing ceases to be useful to the effort of the present section of the discourse, namely understanding the history of liberalism.

Over the ensuing few decades of Keynesian economics and embedded liberalism, various strains of economic thought began coalescing around a return to liberalism. Pioneering this trend was a group of liberal economists known as the Mont Pelerin Society. Perhaps the primary impetus driving this return was the aversion to governmental capture of markets, a risk most prominently enunciated by Friedrich Hayek and other thinkers who would later be referred to as proponents of neoliberalism.

Hayek largely viewed the progressive and social democratic movements of the early twentieth century as nascent forms of totalitarian collectivism, movements which saw citizens of liberal economies incrementally ceding more and more control over markets to governments, thereby sacrificing more and more of their freedom. In the critique of such movements, the argument is that we should avoid granting too much control over markets to institutions, because institutions are composed of individuals who not only have special interests which may compromise their ability to neutrally shape markets, but who also cannot realistically be expected to possess a comprehensive understanding of the markets they are regulating (Hayek, 1940, Excerpts 1, 2).

As a brief aside, the reader may notice how there are valid and substantive arguments to be made from various perspectives on these matters. It is a methodological decision on my part to convey the legitimacy of these ostensibly conflicting views, to extract from them their essential justifying tenets, and to attempt to dialectically reconcile these tenets in an abstract synthesis, in hopes of eventually deriving a more actionable set of policy suggestions from said synthesis. As has already been described, this methodology is necessarily rhizomatic and dialectical in how it chooses to navigate discourse and develop knowledge. While I hope such epistemic tactics do not have their value lost on the reader, one may nonetheless choose to progress with little concern for such scaffolding, if they merely want access to the central ideas.

As regards the emergence of neoliberalism beyond the academic sphere of discourse and ideology, and into political reality, it is argued by Damon Silvers that the 1973 Chilean coup provided an occasion for the germination of neoliberal policy and its ensuing globalization into what we would now call the neoliberal world order. That said, it is also true that Ludwig Erhard, then Minister of Economic Affairs in Germany, joined the Mont Pelerin Society in 1960 and used his office to implement liberal economic ideas in efforts to rebuild portions of the German economy at the time.

While this earlier German implementation of classical liberalism does predate the Chilean implementation, the latter saw a joint influence from the Mont Pelerin Society and from the Chicago School of Economics, which expounded macroeconomic theories in opposition to Keynesianism. This combination of the values of classical liberalism with novel macroeconomic theory is arguably what best characterizes neoliberalism as theoretically distinct from classical liberalism, and as such it may be argued that the Chilean implementation of these ideas into policy, along the lines retrospectively defined by the so-called Washington Consensus, marked the onset of the neoliberal order we know today (Peters, 2021, Excerpt 2).

At this point it may be worth reiterating the central purpose of this section, namely the delineation of how the theoretical basis of neoliberalism differs from the political reality of neoliberalism. The gist of the difference is that the theoretical framework of neoliberalism, if taken sincerely and on its own terms, has at its core a return to the central tenet of liberalism, namely that competition should be enabled to decentralize economic power in markets, toward the end of ensuring the efficiency of said market and the economic liberty of those involved, toward the general prosperity of the public. This, as a good faith argument, seems to have become a decreasingly tenable defense of the reality of neoliberalism, as said reality has proven gradually over time to be less about the preservation of the economic liberty of the average person, and more about the extended accumulation of wealth and power of elite actors in the global economy and their de facto exemption from social accountability. 

This trend has also been referred to in terms of the privatization of power, a phenomenon which can be understood as the excesses of liberalism coming into conflict with the values of democracy, insofar as private power is, perhaps by definition, less institutionally accountable to public interests (Silvers, 2023, Item B, 31:25). Silvers argues that the accumulation of wealth is an upstream determinant of real political and economic power, seeing as this wealth can be deployed in realms of advocacy and legislative influence toward the ends of reinforcing favorable regulatory and economic arrangements (Silvers, 2023, Item B, 1:17:15). Relatedly, in the following section, I will attempt to reconcile a variety of starkly conflicting arguments about the role of lobbying in an economically liberal republic, with the intention of arriving upon an arrangement whereby the interests of individual economic liberty are best balanced with those of collective economic welfare.

As regards the maturation of the neoliberal era, I will now highlight the emergence of certain corollary trends which are criticized from those perspectives, such as progressivism, concerned with collective welfare. Here again I will reiterate that the term ‘progressivism’ is here taken to mean a system of social, economic, and political values oriented around the general improvement of human welfare, and which frequently but not necessarily involves governmental programs which actively intervene in the economy on behalf of such welfare. 

Liberalism, and in turn neoliberalism, on the other hand, are theoretically oriented around individual economic liberty and minimizing the role the government plays in shaping economies. Again, the key thing to understand about the development of the neoliberal era is how the reality of this era has become increasingly detached from what could be justified as its theoretical basis.

Nonetheless, one can see how even the theoretical basis of liberalism and neoliberalism can appear antithetical to the values of progressivism, insofar as liberalism is not fundamentally concerned with collective welfare, but is rather concerned with individual economic liberty, with the assumption that such liberty will, in turn, result in the general prosperity and welfare of the public. The reality of neoliberalism demonstrates that liberalism, when it develops too far in the direction of laissez-faire and market fundamentalism, does not actually promote general prosperity and welfare, but instead, by virtue of the absence of democratic institutions capable of protecting free markets and actively ensuring welfare in manners compatible with free markets, merely promotes the private accumulation of wealth and power, often at the unjust expense of general welfare.

As to how, precisely, the development of the neoliberal order demonstrated a systematic inconsistency with the underlying theses of liberalism, Damon Silvers provides multiple examples. The 2008 financial crisis, and specifically the ensuing bailouts, demonstrated the state actively intervening in a market, picking “winners” in a manner antithetical to liberalism (Silvers, 2023, Item A, 18:27). This is an example of neoliberalism not playing by its own rules.

The absence, however, of a proper regulatory environment to oversee lending practices and prevent speculative market meltdowns, is more construable as a fault inherent to an excessively liberal economy, rather than an example of liberalism not abiding by its own maxims. That is, even if neoliberalism was consistent with the underlying tenets of liberalism, and did not involve the state picking winners, it would still run the risk of being excessively fundamental in its adherence to the tenets of liberalism, in that it still may have resulted in a housing bubble in which the losses were socialized. A point of academic conjecture, to be sure, but such is meant to illustrate a matter of logical nuance, namely that market fundamentalism, even when it stays true to its own justifying tenets, threatens to neglect collective welfare, yet alone when it abandons these tenets. 

This returns us to the understanding of liberalism as prioritizing individual liberty, such that finding the proper balance between individual liberty and collective welfare may require one to take certain principles from liberalism and reconcile them with certain principles of more collectivistic economic models, such as progressivism. Neoliberalism, such as it is, arguably demonstrates no meaningful adherence to classical liberal values, and indeed it hardly seems concerned with collective welfare. To pursue lines of thought in defense of the neoliberal world order, with respect to the reconciliation of individual liberty with collective welfare, seems strenuous at best and disingenuous at worst. Therefore, I thoroughly denounce the whole shebang.

How the Core Economic Tenets of Liberalism and Progressivism may be Understood as Compatible, and their Ends Compossible

Before offering a reconciliation of the values of liberalism and progressivism, let us first, in the interest of maintaining common language, return to what is here meant by the terms in question. Liberalism is here meant in its classical sense, as an economic set of values wherein individual economic liberty, or the ability for the individual to exercise free will regarding their economic choices, functions as the foundational principle. Progressivism, being grounded in the improvement of human economic welfare, is here taken as more of a collectivistic order, concerned with the welfare and security of a population at large. 

To be sure, this is not to assert that liberalism is hostile to or necessarily negligent of collective welfare, nor that progressivism is to individual liberty, but rather that each is defined according to its own principles. That said, one can easily understand liberalism and progressivism as being opposing forces in an argument about how society should be regulated, with each having a critique of the other. The liberal may argue that the progressive is all too willing to dispense with individual liberties in the institution of certain collective welfare policies, whereas the progressive may argue that the liberal is all too willing to ignore the welfare of others so long as their own welfare and liberty is maintained. 

One may argue that the social contract of any functional society requires some concession of individual liberties, in the interest of moderating the conflicting interests of individuals, and such would not be a controversial argument. The controversy concerns the degree and the nature of these concessions, such as the degree to which private enterprise should be permitted within a society, and the circumstances under which certain activities involved in such enterprise ought to be regulated or prohibited by the government. 

The liberal may also argue that economies are more efficient and less opinionated when shaped by market forces rather than by central planners, while the progressive may argue that, by so doing, we risk neglecting the welfare of those insufficiently enfranchised to meaningfully exercise such liberties. Given the reality of the uneven landscape of inherited wealth, and the fact that the economic nature of individuals operating market-based societies cannot always be relied upon to surface just and equitable arrangements, to what extent should governments intervene to guarantee certain aspects of collective welfare? And can such welfare provisions be facilitated in such a way that do not integrally jeopardize the essential liberties of the average individual? So long as private enterprise does not entail anti-social or anti-competitive consequences, it may be argued, governments should allow such enterprise. But in the determination of what is considered anti-social or anti-competitive, certain positions need be taken, positions which may not reflect values universal enough to represent the general will, which such a regulator arguably ought to represent.

Hopefully the above manages to illustrate how this contention may be extended indefinitely through particular considerations, and how deeply rooted it is in the logic of civilization itself. The matter at hand, however, is to conceptualize how these seemingly conflicting principles, at essence, can be held in some degree of harmony, and how the bulk of their apparent conflict is contained in the particular means employed toward their ends, rather than between the principles themselves.

To conceptualize a system wherein the principle of individual economic liberty coexists with that of collective economic welfare is not, I argue, difficult in the basic philosophical sense. One can imagine, in vague and abstract terms, a societal arrangement whereby markets can spontaneously and autonomously develop under the relatively passive stewardship of a republican government which intervenes under circumstances of anti-competitive and anti-social activity, and which provides for the basic welfare of citizens, thus empowering them as market participants, in manners that do not compromise the spontaneous nature of free markets to drive innovation and industry.

This conceptualization of the state, as both the steward of the free market and the guarantor of the basic welfare of market participants, can be understood as a synthesis of the defining tenets of liberalism and collectivism. Hopefully such a conceptualization may serve as a sound basis for the concrete prescription of policy suites, but such is beyond the scope of this discourse, which is more abstract in nature.

To what extent could this arrangement embody the values of progressivism, without compromising the values of liberalism? While the precise implementation of welfare programs may vary and require certain iteration, so as to ensure minimal infringement upon spontaneous market dynamics, such policy efforts would constitute one front of social progress, namely the statist front. In addition to this statist front, there also exists potential for a coordinated private-sector front for the promotion of collective welfare and public goods, but such will be addressed in the following section of this discourse.

A word may be warranted on how one should understand this liberal argument that markets should remain “spontaneous” rather than planned. The distinction is ultimately between a market which is consciously managed in its entirety by a state body, whether said state body is a republic or something more autocratic, and a market which is shaped more by the uncoordinated, or spontaneous, economic activities of a number of market participants. In the former case, the economy is the object of state management, and the onus of efficient economic planning is on the state, thus requiring the state, and specifically the officers within it, to maintain a comprehensive visibility into economic affairs.  

This distinction between two extremes, between total state management and total laissez-faire, is not a realistic distinction, so much as it is a conceptual distinction, useful in terms of conveying the ideas at play here. In reality, at least in most liberal economies, some degree of state management and regulation is involved, but within a wider context of otherwise spontaneous markets. It is in this sense that the term ‘mixed-market economy’ may be understood. 

If the globalized status quo of the mixed-market economy already consists of a blend of governmental planning and “spontaneous” market development, what is the point of working out these conceptual frameworks oriented around an end which, in some manner, already exists? It is ultimately in the interest of sensemaking, of developing a greater comprehension of what may otherwise remain a confounding admixture of historically loaded and rhetorically polarizing ideas. For market participants to develop a keen and discriminating sense of when government intervention actually bolsters their economic liberty, is indeed a prospect characterized by classically liberal values. 

Because classical liberalism, at least as it is depicted here, is largely agnostic about collective welfare beyond the scope of individual liberty, one can advocate for collective welfare in manners which do not violate the axioms of liberalism. One’s advocacy for collective welfare tends to violate the axioms of liberalism when one also advocates for coercive means in order to secure some degree of collective welfare. The tricky part, it seems, is to identify means toward collective welfare which comes at a minimal expense of classically liberal values.

So how may collective welfare be promoted so as to minimally infringe upon the fundamental values of individual liberty? Any practical policy prescriptions are not only beyond the scope and nature of this inquiry, but also beyond my present knowledge of the matter. What has been offered thus far in this inquiry is, instead, a mode of distilling and reconciling the key values at play, and what is offered below is a variety of trends and experiments perhaps worthy of the attention of those concerned with such values. 

Assorted Prospects of Philanthropic Complexes, Algorithmic Collective Agency, and Novel Funding Mechanisms for Public Goods 

At the periphery of institutionally adopted economic thought and practice, reside a number of mechanical curiosities and promising, if utopian, theoretical prospects. What follows here is a succinct expose of various developments and ideas which may go on to inform efforts at promoting collective welfare within the larger constraints of preserving individual liberty.

For all the confusion it arouses, and despite what criticism it deserves, blockchain technology just so happens to embody a certain harmony between individual liberty and collective welfare. Indeed it likely comes as news to many that there exists a vibrant and global ecosystem of organizations utilizing this technology to experiment with novel processes for funding public goods. 

Here, it is worth clarifying that the term ‘public good’ is meant in its conventional economic sense, namely as a non-rivalrous and non-excludable good; that is, a good whose benefit may be enjoyed freely and inexhaustibly by the general public. Also worth noting here is how the systematic creation and support of public goods can constitute a model for promoting collective welfare without injuring individual liberty. 

Having established what is meant by the term ‘public good’, it may now be worth elaborating the manners in which this particular ecosystem of organizations has been promoting public goods. First, it should be noted that the public goods in question primarily consist of open-source software, often but not exclusively involving smart contracts. Because open-source code can be copied freely and infinitely, it qualifies as a public good, however niche its beneficiary base may be in a particular situation.

One particularly interesting class of smart contracts in this domain are those enabling quadratic funding. Similar to how an institution may contribute a fund to match the donations from individuals within a given fundraising campaign, the quadratic funding model involves sourcing funds from matching donors and individual donors alike. A number of grantees accept donations from individuals and, after a set period of time, receive an additional amount of funding from a matching pool, according to the number of individual donations each grantee receives. The matching fund itself is a smart contract, which institutional donors deposit currency or assets into, and which is managed by the grant program manager, who is able to trigger disbursements from the matching pool to the grantees. 

Because the smart contract is open-source, and because the underlying blockchain constitutes a public ledger, every movement of funds into and out of the matching pool is public. Over the last few years, this technology has reached a level of adoption such that, while still niche in terms of its user base, it is able to sustain an entire subculture and ecosystem of public goods projects, ranging from environmental preservation efforts to pro bono legal counseling services. All of the organizations which receive funding from this system have their treasuries in the form of blockchain accounts, which are all also public. 

Here is perhaps a good time to take a step back and address certain downsides of the underlying technology, so as to avoid depicting it in a utopian manner. By and large, blockchain technology, insofar as it enables self-managed financial accounts, radically embodies certain values of self-sovereignty associated with liberalism and the enlightenment. Running on a global peer-to-peer network of computers, it constitutes an economic framework governed by agreed-upon protocols, rather than institutions. Such impersonal economic protocols can qualify as classically liberal insofar as they can set the conditions for emergent market developments, wherein all economic actors, through instant and "permissionless" creation of accounts, are equal vis-a-vis the protocol.

The above is intended to provide a basic sense of technological and cultural context with regard to the topic at hand, namely the particular experiments using this technology to innovate upon models for funding public goods. In the case of the quadratic funding protocol briefly outlined earlier, because it takes the form of open source software, anyone can copy it and run their own quadratic funding program, and they will be able to do so for as long as the underlying network persists. 

It is not my intention to proselytize this the reader into embracing this technology, but rather to provide a critically optimistic perspective on some of its more prosocial applications, for the purposes of informing the imagination of the reader as they consider such dilemmas as how collective welfare may be promoted in manners consistent with the values of classical liberalism. The example of quadratic funding is but one, alongside other similarly prosocial applications of this technology, such as public impact certification and retroactive public goods funding. In the last year, between the numerous grants programs managed by organizations like Gitcoin and the Optimism Foundation, over $100 million has been distributed to individuals and organizations creating value in the form of public goods.

The increasing prominence of these novel public goods funding mechanisms has also sparked industry-wide critical discussion around public goods, such as how they are to be qualified, the manner in which they can be sustainably funded, and various other considerations having to do with the systemic implementation of these collectivistic economic models. Indeed, here there may be observed some degree of conceptual and ideological resonance with certain ideas popularized by and commonly associated with Henry George, especially the land value tax. More specifically, if one were to take the land value tax as a point of conceptual departure, and from there generalize an economic principle of public goods yielding returns to their corresponding communities, one could understand many of the aforementioned blockchain mechanisms as experiments in the application of a generalized Georgism.

It remains to be seen, at the present stage of this ecosystem, the extent to which these non-state mechanisms for funding public goods may scale beyond the scope of a highly technical community of users and donors, and whether their accessibility will expand to include a more general audience. At any rate, it all strikes me as a promising example of how collective economic welfare may be promoted in a manner compatible with individual economic liberty.

It is hoped that the content of this discourse, piecemeal as it is, may serve as a sort of sensemaking fertilizer for the formation of more cogent theses regarding the economic topics at hand, and as an constructive and exploratory iteration on the mode of writing I here refer to as auto-discourse. What began as an attempt to succinctly explore a question of reconciling certain economic tenets has evolved into an exercise of epistemic methodology, perhaps at the expense of the initial impetus, or perhaps to its long-term benefit. 

While a dialectical historicist reading of the development of western society may breed risk of dogma, one can begin to imagine a world-historical synthesis of the individualist and collectivist economic orders, characterized by the spirit of a generalized Georgism, enabled by novel peer-to-peer economic technologies, and jointly loyal to the values of individual liberty and collective welfare.

Resources

Hayek, F. A. (2009). The Road to Serfdom: Text and Documents: The Definitive Edition

  • Excerpt 1, Page 51 - "There would be no difficulty about efficient control or planning were conditions so simple that a single person or board could effectively survey all the relevant facts. It is only as the factors which have to be taken into account become so numerous that it is impossible to gain a synoptic view of them, that decentralisation becomes imperative."

  • Excerpt 2, page 65 - "The effect of the people agreeing that there must be central planning, without agreeing on the ends, will be rather as if a group of people were to commit themselves to take a journey together without agreeing where they want to go: with the result that they may all have to make a journey which most of them do not want at all."

Peters, M. (2021). “The early origins of neoliberalism: Colloque Walter Lippman (1938) and the Mt Perelin Society (1947)” 

  • Excerpt 1: “Indeed, Walter Eucken and Franz Bohm developed ordo-liberal social philosophy centred around the concept that the market itself was a juridical construction and not a naturally occurring phenomenon.”

  • Excerpt 2: “Neoliberalism as a term and discourse of political and economic liberalism and set of policies, originating in the late 1970s, that wielded together classical liberal political theory as exemplified by the Mont Pelerin Society following World War II (WWII) and neoclassical economic theories that represented the so-called Chicago school. It is ultimately a moral doctrine based on a classical account of political and economic freedom that became the basis for government administrations and policy regimes based on the minimal state and free market, often brutally established with force and coercion, against the rule of law, and in an antidemocratic way, such as in Chile in 1973.”

Silvers, D. (2023). Item A: “Understanding Neoliberalism as a System of Power” (Lecture, UCL Institute for Innovation and Public Purpose)

Silvers, D. (2023). Item B: “Beyond Neoliberalism: How to Think About Rebuilding the Capacity of the Democratic State” (Lecture, UCL Institute for Innovation and Public Purpose)



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