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Vladimir Okhotnikov’s philosophy of decentralization 2024

Vladimir Okhotnikov is a publicist, philosopher, expert in IT and blockchain. Vladimir is a well-known critic of state regulation policy and an advocate of business freedom. 

Vladimir Okhotnikov about centralized control system

Traditional public administration is based on a centralized hierarchical system. Centralization implies a superior-subordinate relationship when the superior makes a decision and the subordinate executes it. At first sight such a system seems the most natural, and governance systems of States and businesses are based on it. 

By and large, the difference, for example, between a monarchy and a republic lies in the technology of a leader election.

Even the direct democracies of antiquity, when decisions were taken by voting in the square, sooner or later led to the choice of a leader.

The search and selection of the chief, the leader, is a pattern of behavior that comes from the animal world, and therefore seems the most natural. The human being is the essence of society, and the survival of a community requires a system of quick and effective decisions. Nothing like a centralized hierarchy to begin with. 

«Humans by nature live within paradigms from which it is very difficult to get out. A centralized system of government seemed to be the only possible one until a moment. The discussions focused on the personalities of the leaders. The ideal of social organization was the state led by a wise ruler. It was impossible to imagine a state without a leader, the same seemingly smaller structures. Here the inertia of thought was intensified by the active rejection of alternatives by the ruling classes. The concept of wise ruler is found among thinkers of all times and peoples – from Confucius to modern philosophers…»

Vladimir Okhotnikov

The leader may be one person, or it may be a collective body, it does not play a fundamental role in terms of the overall design of the management system. A subordinate does not care whose orders to follow – one monarch or a large parliament. 

The evolution of the social order has tended to create and complicate procedures for determining the decision-maker. Theoretically, the procedures are aimed at maximizing the opinions of all members of society and choosing the most capable individuals as the head.

Is democracy real?

Currently, democracy, or even liberal democracy, is presented as the ideal model for building society. It was her American philosopher and political scientist Francis Fukuyama who proclaimed an ideal, a point of perfection, after which any social development becomes meaningless. It’s the end of the story.

However, it turned out that expectations did not coincide with reality at all. Towards the end of the story, we have a long and unexpected way to go.

The problem is not the wrong ideals of democracy, they are beautiful. The issue is their feasibility. Can a truly democratic society be built and endure for long? Fukuyama’s claims have been refuted by the practice. Why? Why did not the beautiful ideals of democracy conquer the world and establish paradise on Earth? What is commonly called democracy is in fact a traditional centralized system of government. The basic feature of democracy is elections designed to determine the decision-maker. Elections are based on a variety of rules and procedures that should ensure representativeness and credibility of results. It seems that really the best people should be chosen, able to make the most effective decisions, reflecting the will of the majority and, of course, taking into account the opinion of the minority.

However, if we look at reality and assess the personalities of decision makers and the results of their activities, then we have serious doubts about the correctness of the choice. Do we really have presidents and premiers in countries that call themselves democracies – models of effectiveness and focus on the best?

The main problem with elections is that they work perfectly in small communities where there is direct communication between all community members and the candidate. Everyone knows each other and is guided by objective knowledge and experience. Ideally, the best community leader can be chosen. Reality is different from ideal since manipulation and pressure on voters are always possible.

The situation changes fundamentally if there is a candidate not known in the community, or the community is too large, and its members cannot know everyone.

In this case, voters do not vote for the candidate, but for his image, which has been brought to their consciousness.

Therefore, the electoral struggle is reduced to creating the most attractive for voters image of candidates. As a result, there is a competition between teams of technologists.

This technology leads to the fact that the team that promoted the candidate and made him leader comes to power. There is another option: there is a one group supporting all candidates. This is a win-win lottery. Political preferences lead to “elitists”, that is, groups that actively influence on decision-making. Political power is converted into economic preferences. Thus, a democratic system leads to economic inequality.

«Democracy is beautiful. Outwardly, everything should be fine: slogans, people, events. Today, the content is secondary and the form is primary. We vote not for the person, but for his image. All procedures are a simulation, and democracy itself is a simulation… The outward beauty hides the unsightly reality…»

Vladimir Okhotnikov

What is called democracy is perfectly mastered by the art of imitation.

This is, of course, a schematic description of the complex processes by which the state has been and remains a tool for advancing the interests of elitist groups. Hence there are many rules, laws, regulations created to control business and citizens.

Democracy is associated with capitalism. However, modern capitalism is infinitely far away from the model presented in the early 19th century by Adam Smith. 

The “invisible hand of the market” has been replaced by direct regulation by the state. Is regulation always bad? Of course, the market needs rules, the issue is who sets them. In a centralized system, the state does it. Are there alternatives?

Decentralization as the foundation of the business of the future

Decentralization is one of the most popular terms in the modern IT industry. Decentralized systems are gradually entering the market in the form of a variety of services and applications. However, their potential is much wider – up to public administration.

By democracy sometimes is meant replacing one “large” control center with many smaller ones. The rule of the king passes to the barons who govern not the country, but their region. In fact, it is merely a change in the scale of the centralized system, not its essence.

Decentralization implies the equality of all participants in the system. Their relationships are governed by pre-determined rules and contracts. The system itself is designed to maintain sustainability and to monitor contract performance.

With external simplicity, the technical implementation of decentralized systems is quite a difficult task. The problem is not only to start it, but also to prevent it from becoming centralized.

For the first time, Satoshi Nakamoto offered a truly complete decentralized system. It was blockchain and bitcoin technology.

It is wrong to think of blockchain as an appendage to cryptocurrencies. It is, above all, the basis. 

It is a control system intended to administrate a variety of decentralized services, including full-fledged metauniverses.

A typical blockchain-decentralized system is managed by smart contracts, which set out the terms of interaction of participants and monitor their performance. Blockchain guarantees the security of the system from hacking and any actions of third parties, and smart contracts ensure the accuracy and unconditionality of the system rules and agreements of participants.

Absolutely all participants are equal, no one has privileges. In fact, a decentralized system works like a robot, obeying given algorithms. In this sense, it is not a “big boss” but a technical specialist and intermediary.

Decentralization guarantees what is, in fact, a true democracy in its original sense. The system ensures equal rights of participants, absolutely accurate compliance with contracts, freedom of choice, scalability, and absence of “human factor”. At the same time the system is stable and does not have a tendency to degenerate into centralization. In crypto business, decentralization supports the security, anonymity and privacy of users.

Is it possible to scale up decentralization to governance systems for public institutions? 

Yes, of course. 

Of course, in world politics any force majeure circumstances are possible, and it is a thankless thing to make predictions. However, the efficiency of decentralized systems suggests that they should be integrated into public administration. This will not happen here and now, the process will be slow. Revolution is not to be expected, and evolution is not quick, so it will have to wait.

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