Skip to content

➕ Liberally radical

Before being too radical, we must reflect on where we've been. Understanding the play of complementary opposites allows us to see that trustless systems require that we define and encode what it means to cheat. This creates new means for meaning - public protocols in the same sense as language - which allow for valuable collaboration at scales not before possible.

In order to frame these kinds of shared stories, we need to ask better questions that go the heart of our intentions and stem from an honesty and humility about our limits as human beings. This inner orientation, combined with technologies that encourage interpersonal trust between sovereign individuals, can be used to create emergent, responsive, communal structures better suited to coping with the complexity of the modern world than our current institutions.

Optimal Gathering

However, we can't wave our hands, say "emergent communal structure", and leave it at that. We need to use modern mathematical tools to model optimal collective decision making. The best means put forward so far is the mechanism of Liberal Radicalism, whose goal is "to create a funding system that is as flexible and responsive as the market, but avoids free-rider problems".

It's not enough to build tools that let people govern themselves, we have to craft the incentive structures which encourage the majority to behave in everyone's better interests. This is how healthy communities actually emerge: sovereign tools which encourage collaboration without compulsion. Malicious behaviour is just provably more expensive than its effects.

Here's the key idea: if individuals contribute to the public goods they use and the funding principle underlying the market is nonlinear, then we can make sure that "small contributions are heavily subsidized (as these are the most likely to be distorted by free-riding incentives) while large ones are least subsidized, as these are more likely private goods."


Classical capitalism deals poorly with public goods problems because each individual, if she acts selfishly, only accounts for her own benefits and not the benefits to all others. We can do better now that we have a world computer which allows us to agree always on the history and validity of our transactions, and which is open to anyone anywhere the internet is.

Making optimal decisions about public goods and how to fund them is hard, though: the math is as complicated as elliptic curve cryptography. Happily, all you need to know here is that we want to model citizens' different preferences; their ability to make negative contributions; and we don't want to assume prior centralized knowledge about what good to fund.

The math just proves that ensuring "the amount received by the project is (proportional to) the square of the sum of the square roots of contributions" is the most optimal means of making large-scale economic decisions about public goods. Such a design also means that "holding fixed the amount of the contribution, the funding received grows as the square of the community size" which kicks capitalism's ass, especially when it comes to funding goods on the margin.

Free Radicals

LR does not prejudge the optimal size of communities, but instead "offers a mechanism that creates truly neutral incentives among social organization of different sizes". It also has the property that it "reverts to a standard private good in the case that a single citizen attempts to use the mechanism for her own enrichment."

"To summarize, the mechanism provides much greater funding to many small contributions than to a few large ones. This is not for any reason of equity or distributive justice, though there may be good reasons from those perspectives to admire the outcome it delivers.

This is a critical point: egalitarianism, or equitable outcome, is a great success metric: it is not a good design goal (precisely because there are so many ways to measure outcomes). Bitcoin makes no assumptions about equality: it just implements a system for "peer-to-peer electronic payments". The rest is on us, and how we model the most efficient means of using technology.

Liberal Radicalism:

"seeks to achieve liberal ends in a fundamentally social world. In this sense it is also 'radical' in the original meaning: it gets to the roots of what liberalism is about, namely an anti-authoritarian commitment to neutrality across ways of living and valuing."

Practice Makes Perfect