Staking Government

or... upgrading real-world constitutions using crypto value staking

By Tom Veatch

Why Government

Governments are instituted to help everyone get along better. To define the boundary of "Do anything you like" by a watched and enforced limit: "But don't interfere with others." External effects of transactions between parties, a.k.a. externalities, need to be regulated so that transactants happily doing their deal together don't hurt the rest of us today or tomorrow.

Sometimes governments get too big for their britches, following more the principle of "Don't do anything but what we like." which is stifling to the indomitable human spirit.

Everyone hates government whenever it interferes with them. Everyone loves government whenever it makes anothers do what they want the others to do, which is mainly but not only getting out of the way.

I believe government has an important policing role, because bullies detect a vacuum and step in to abuse others in their self-interest. For the bullies, it works, and noone is there stopping it, so (sh)it happens. Best is where everyone self-polices because everyone is well socialized. But without some police on the job nearby somewhere, things can and do deteriorate.

Why Not Government

Democratic, rules-based governments also have the problem of capture. Some bright idea gets legislated into being, say like the "Environmental Protection Agency", and all the hippies go home happy (with Nixon, in this case), but the people who actually get paid to violate environmental protections, because they make money from violating environmental protections, those people are willing to pay regular amounts to lobbyists and lobbying. Under the radar, the industry hacks become the head of the EPA, and re-engineer it to protect less and less, or to protect the industry from the environmentalists, a la Orwell.

Similarly, we install the bright idea of democracy by tossing out the former king, but later on we are enslaved again, by the steady negative force of our own irrationalities, when politicians discover they can take and hold power against the interests of the people if they incite certain feelings like tribal hostility, or temperament-based emotional disagreement (e.g., Republican lower intelligence, higher disgust sensitivity, and pro-boundary-maintaining personality characteristics vs Democratic (relative) intelligence, disgust insensitivity and boundary-updating personality characteristics). These powerful id forces can make even siblings hate each other. Once they are under the reins of politicians, they can decide anything they like, such as well-paying, pro-corporate, anti-environment, short-termist policy that quickly covers the world in shit excepting for a few Club Med vacation spots and their gated wealthy communities. I exaggerate slightly. The incited hatreds of the people turn out to be more important to the people than the long-term health of themselves, their heirs, or the current or future world.

Thus a negative spiral in government arises. Regulatory regimes are captured by corporate interests, generally by those who benefit from transactions with negative externalities. Those interests get paid by that kind of transaction, so they exert constant and profitable pressure on governments to allow them to continue.

We find ourselves locked into a hostile internal political spiral, a regulatory regime built on once-idealistic foundations but re-engineered to protect harm as much as good, and to protect those who profitably cause harm.

Three most egregious aspects, for a believer in democracy, are

It was the "Great Compromise" during the constitutional convention, which persuaded all the 13 separate countries, that were together victorious in our American revolutionary war, to agree to the thing; it was because even the small-population states also got two Senators and at least a minimum of Representatives, so they wouldn't be swamped by the big-population states. This gave to the small states, and later to rural America, an outsize weight in government compared to the headcount based weighting of a true democracy. This anti-democratic, imbalanced influence is mainly in the state-level influence on the federal government.

The same original agreement established the electoral college re-voting system whereby the popular vote becomes relatively meaningless, controvertible by professional politicians whose interests may, typically do, not coalign with the public. The separate popular votes are separately binned and re-counted again according to each state's number of Senators plus Representatives, which as we see outsizes the small state, which end up being the rural states. One vote in Wyoming is worth fourteen votes in California.

The system is again balanced to reduce the influence of the individuals in the high-population states, that is, to minimize actual democracy.

Finally, gerrymandering whereby the party in power as each 10 year census comes in, can rewrite the voting district maps in its favor to lock in its position, also is a disaster for democracy. Forget about disenfranchising minorities, this can disenfranchise majorities!

For example suppose you had 58 A's and 42 B's, in 10 districts of 10 each, but you could move the map around to always have 10 in each but not necessarily balanced. In one map you *could* create seven 4A/6B districts and three 10A/0B districts (adding up to 7*4+3*10=58 A's and 7*6+3*0=42 B's). But the B's will get 70% of the representatives, seven versus three in this thought experiment, despite being only 42% of the population. This is how gerrymandering can and does reduce the relative influence of some voters versus others.

It is all crap, bullshit, and criminal. We need to do away with it.

Staking Government to Improve Government

The simple, fair, valid, and revolution-preventing principle is, one person, one vote, weighted equally, at each level of the system, and any deviation should be back-edited out of the constitution so as to be compatible with this principle. Agreed? Agreed.

Okay, great. Let's turn to implementation. How do we get this, or anything, enshrined in actual laws and an actual government to be governed by it? How do we remake our own government, when the incentives of the politicians who could actually change the laws are systematically misaligned with the people who want democracy? MIT's recent study showed that the people's desires are systematically ignored by lawmakers. When folks come to office hours in the capital, and get glad-handed out the door by a smiling, nodding, mealy-mouthed hypocrite with previous commitments to corporate interests and consistent corporate funding, how can the interests of the people be made, or even allowed, to predominate, to take over such a corrupt and sclerotic system?


What is Staking?

A staking event seems to be a smart contract with four components. A donor or staker. A decision event with a question and a date, answerable by a trusted objective authority. A recipient if the answer is Yes. A recipient if the answer is No.

Staking is the way.

I've thought about this for a long time. For example suppose you have some corrupt third world country full of aspiring democrats and entrepreneurs, but an established, corrupt system that prevents their voices being heard and avoids accountability to proper behavior by those in power. Suppose.

Then you get the whole intelligentsia and commercial classes of the country emigrating to the US or UK or some tolerant, well-behaved place where human rights matter and ambition is not stifled. Then the forces for good in that country suffer severe brain drain, and the corruption which was already entrenched is even more immoveable.

But look, all it takes to change everything is one short moment where everyone, or nearly everyone, agrees to change everything, then everything can change. It's not actually, hard, it just seems impossible, because the local powers that be are so entrenched, and no alternative path seems to be able to gain critical mass. So that's the question. How can the emigrants reawaken the greatness of their home country when it is bandaged like a mummy under swaths of corruption? Here's how.


Staking is the way.

Tie money to outcomes. It will find a way.

For example, stake future donations to politicians based on adherence to a principle-based position. If they vote against, the stake is lost to the politician and perhaps shifted to their opponent or another advocate for that cause.

For example, measure a politician's alignment with your principles by how much they have staked on adherence to that principled position, or on successful outcomes measured by that principle. If the politicians have skin in the game, they will surely make the right thing happen.

For example, stake some value to your own unwillingness to cooperate with corrupt officials; if you have to pay a bribe to them then the stake goes to an anti-corruption fund.

For example, crowdsource a staking pool tied to legal or social conditions. If the conditions are not met, the stakes are lost and redirected to support more muscular advocacy for those conditions.

In this way, staked value can link the political and social reality of an ideal or improved future to the motives and (financial) votes of people today.

Emigrants can stake value on their home country achieving metrics of reduced corruption, ease of starting and running business, improvements in education or other public policies, an end to bribery among this or that branch of government, etc. The muscular alternative might be something the powers that be would not like to see strengthened, and thus they would be motivated to make changes on their own.

If advocates are willing to put skin in the game, then things will tend to coalign with their positions.

Perhaps big polluting businesses, for example, will tax their illicit gains to stake value to the continued support of their current structures. That could prevent progress, or induce a negative spiral also. It needs to be gamed out, what is the relative power in the staking pool world of good versus evil. In general I have faith good will win out over evil, especially as light drives out darkness: when Monsanto's individual staking pool receives $1M, in the light of day, then a world of donors will join together and outdonate the isolated misbehaver.

Even so, if there are two staking pools pro and con regarding some principle or issue, the winner may or may not be the bigger pool, but each pool will at least help to organize, publicize, and catalyze their positions. Also counteradvocates wanting to not see the muscular alternatives arise, will seek accommodations within the system so as not to face escalation.

In summary, in "Staking Government" I have proposed a space of meaningful advocacy outside the institutions of government which nonetheless can influence the institutions of government more or less directly and through mass participation, irrespective of the criminal, backward, or broken state of said institutions.

While things may indeed work locally for the local people and power structures, if only for the close associates of a despot in the vast slums of some benighted country, but if everyone, even there, behind their masks of submission, were nevertheless on board with removing or upgrading that despot and that corrupt system, with staked value tied to change and outcomes, wouldn't it tend to become a better world?

I suspect so. Thus, this small essay, to provoke thought and, I hope, change -- for the better.

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Copyright © 2022, Thomas C. Veatch. All rights reserved.
Created January 3, 2022; Modified October 1, 2023.