Blockchain: An Entangled Political Economy Approach

With Darcy Allen and Mikayla Novak. Published in the Journal of Public Finance and Public Choice.

Abstract: This paper incorporates blockchain activities into the broader remit of entangled political economy theory, emphasising economic and other social phenomena as the emergent by-product of human interactions. Blockchains are a digital technology combining peer-to-peer network computing and cryptography to create an immutable decentralised public ledger. The blockchain contrasts vintage ledger technologies, either paper-based or maintained by in-house databases, largely reliant upon hierarchical, third-party trust mechanisms for their maintenance and security. Recent contributions to the blockchain studies literature suggest that the blockchain itself poses as an institutional technology that could challenge existing forms of coordination and governance organised on the basis of vintage ledgers. This proposition has significant implications for the relevance of existing entangled relationships in the economic, social and political domains. Blockchain enables non-territorial “crypto-secession” not only reducing the costs associated with maintaining ledgers, but radically revising and deconcentrating data-conditioned networks to fundamentally challenge the economic positions of legacy firms and governments. These insights are further illuminated with reference to finance, property and identity cases. Entangled political economy provides a compelling lens through which we can discern the impact of blockchain technology on some of our most important relationships.

Fast track available at the Journal of Public Finance and Public Choice

Imagining the Blockchain Economy

With Sinclair Davidson and Jason Potts. Meanjin, vol. 77, no. 2 (winter)

Abstract: For the first few years after its invention, the laser was described as ‘a solution in search of a problem’. Now lasers are everywhere. They’re used to scan barcodes, remove tumours and analyse chemical compounds. But initially no-one was quite sure what to do with this new technology. We have the opposite problem today. We’re facing down a wall of radical inventions and innovations that we can easily imagine will transform our world.

Available at Meanjin and informit

Cryptodemocracy and its institutional possibilities

With Darcy WE Allen, Aaron M Lane and Jason Potts. Review of Austrian Economics, 2018.

Abstract: Democracy is an economic problem of choice constrained by transaction costs and information costs. Society must choose between competing institutional frameworks for the conduct of voting and elections. These decisions over the structure of democracy are constrained by the technologies and institutions available. As a governance technology, blockchain reduces the costs of coordinating information and preferences between dispersed people. Blockchain could be applied to the voting and electoral process to form new institutional possibilities in a cryptodemocracy. This paper analyses the potential of a cryptodemocracy using institutional cryptoeconomics and the Institutional Possibility Frontier (IPF). The central claim is that blockchain lowers the social costs of disorder in the democratic process, mainly by incorporating information about preferences through new structures of democratic decision making. We examine one potential new form of democratic institution, quadratic voting, as an example of a new institutional possibility facilitated by blockchain technology.

Available at the Review of Austrian Economics. Earlier working paper available at SSRN.

Adam Smith and Jeremy Bentham in the Australian Colonies

History of Economics Review, Volume 68, 2017:  2-16 DOI: 10.1080/10370196.2018.1449084

Abstract: How did 19th century Australians think about liberalism, economics and political economy more generally? Nineteenth century Australia has been described variously as having a ‘neoclassical’, enlightenment, or Benthamite political culture. This paper provides an empirical approach to the question of early Australian ideas. Exploiting the records of 1891 book sales and auctions in Australia between 1800 and 1849, the paper examines the relative prevalence of key economic, political and liberal texts available to 19th century Australians. The works of classical enlightenment authors such as Adam Smith and John Locke were far more prevalent, and more likely in demand, than those of Jeremy Bentham. To the extent utilitarian ideas were prevalent, they were more in the form of William Paley’s conservatism than Bentham’s radicalism.

Accepted manuscript available at SSRN.

Subjective Political Economy

With Darcy Allen. Published in New Perspectives in Political Economy (2017), Vol 13, no. 1-2, pp. 19-40.

Abstract: We extend the Institutional Possibility Frontier (IPF) – a theoretical framework depicting the institutional trade-offs between the dual costs of dictatorship and disorder – by incorporating the notion of subjective costs. The costs of institutional choice are not objectively determined or chosen by a society; rather, they are subjective to the political actor that perceives them. Our methodologically individualist approach provides a new, highly adaptable extension of the IPF enabling examination of the political bargaining process between dispersed actors, the bounds and evolution of institutional innovation and discovery, and follower-leader dynamics in long-run institutional changes. Our new Subjective Institutional Possibility Frontier (SIPF) helps to integrate ideas into the economics of political systems, creating the foundations for a more subjective political economy.

Available in PDF here.

What Diplomacy in the Ancient Near East Can Tell Us About Blockchain Technology

Published in Ledger (2017), vol. 2, pp. 55-64.

Abstract: A blockchain is an institutional technology—a protocol—that allows for economic coordination between agents separated by boundaries of possible mistrust. Blockchains are not the only technology in history to have these characteristics. The paper looks at the role of the diplomatic protocol at the very beginning of human civilisation in the ancient near east. These two protocols—diplomatic and blockchain—have significant similarities. They were created to address to similar economic problems using similar mechanisms: a permanent record of past dealings, public and ritualistic verification of transactions, and game-theoretic mechanisms of reciprocity. The development of the diplomatic protocol allowed for the creation of the first international community and facilitated patterns of peaceful trade and exchange. Some questions about a generalised ‘protocol economics’ are drawn.

Available at Ledger

Nudging, calculation, and utopia

With Sinclair Davidson. Published in the Journal of Behavioral Economics for Policy (2017), Vol. 1, special issue, pp. 50-52.

Abstract: In this paper we provide a critique of behavioural economics or nudging as a basis for practical policy making purposes. While behavioural economics operates as a plausible critique of standard neoclassical economics, it suffers from the same methodological errors inherent within that tradition. Just as socialist planners lacked the information (and incentives) to allocate resources across an entire economy and economists lack the information to optimally correct externalities, so too libertarian paternalists lack the information to second guess consumer preferences and opportunity costs.

Available at the Society for the Advancement of Behavioral Economics.

Is science the answer?

With Michael Keane. Published in BJA: British Journal of Anaesthesia, aex334, 4 October 2017

Abstract: Nearly ten years ago, Tobin described the irony that evidence-based medicine (EBM) lacks a sound scientific basis. A sentinel paper concluded that most results of medical research were false, and now the same author, a well-lauded EBM proponent, argues that even if true, most clinical research is not useful and now concedes that EBM has been ‘hijacked’ by ‘vested interests’ including industry and researchers.4 The community expends vast resources on research, yet it has been estimated that there is an 85% ‘waste in the production and reporting of research evidence’ … Should we continue with the same paradigm and expect better results? In this counterpoint, we argue ‘no’.

Available at Oxford Academic

“Stop This Greed”: The Tax-Avoidance Political Campaign in the OECD and Australia

With Sinclair Davidson. Published in Econ Journal Watch (2017) vol. 14, no. 1, pp. 77-102.

Abstract: Corporate tax avoidance has come to be a major political and popular issue. This paper considers the evolution of the corporate tax debate; it scrutinizes the empirical claims and the calls for crackdowns on corporate tax avoidance. It focuses on two jurisdictions, the OECD and Australia, to show how international claims were reproduced in domestic political rhetoric. The paper then considers the economic function of tax competition, and examines the evidence underlying the OECD’s claim that the corporate tax base is being “eroded” by “profit shifting” to lower tax jurisdictions.

Available at Econ Journal Watch

Section 18C, Human Rights, and Media Reform: An Institutional Analysis of the 2011–13 Australian Free Speech Debate

With Sinclair Davidson. Published in Agenda (2016) vol. 23, no. 1, pp. 5-30.

Abstract: The paper examines two Australian freedom-of-speech controversies between 2011 and 2013 – the debate over section 18C of the Racial Discrimination Act, and the debate over the Gillard Government’s print media laws. These controversies featured rhetorical and ideological debate about the limits of free speech and the nature of human rights. The paper applies a ‘subjective political economy’ framework to these debates in order to trace the effect of increased perceived ‘disorder costs’ and ‘dictatorship costs’ of freedom of speech restrictions. The paper concludes that policy change is driven by exogenous changes in perceived institutional costs. In the case of the Gillard Government’s media laws, those costs were borne by the Gillard Government, and one would not expect print media laws to be a major political issue in the absence of a further exogenous shock. In the case of section 18C the revealed dictatorship costs of legislation, which includes the words ‘offend’ and ‘insult’, suggest the section 18C controversy will endure

Available at Agenda