**Preprint** to appear in Defining Web3 (DuPont, Dylan-Ennis, and Kavanagh, 2022)

Now, should we trust these people, no matter how well-intentioned they might be, to guide society into the future, … I’d say “no.”

~ Evgeny Morozov, “Web3: A Map in Search of a Territory”

In a recent essay, Evgeny Morozov offers a critical biography of web3 by tracing its popular rhetoric through Tim O’Reilly and Marc Andreessen. Inhabiting the spirit of arche-critic David Golumbia, he discovers vast “linguistic and analytical pollution” in web3, underpinned by opportunistic hustlers. He accuses web3 advocates of self-referentiality and performativity, questioning whether web3 is even a meaningful analytical concept. The issue, Morozov emphasizes, is not that “web3” or “metaverse” are poorly defined words (though they might be), nor that some “academic, intellectuals, and policy experts… [will] accept cash for lending their names and reputations” (they have), rather, the value of even “well-intentioned” web3 projects is pretty much nothing (“it’s spin all the way down,” Morozov chides). Worse still, these well-intentioned rubes act like capitalism’s yeomen and are basically responsible for “left-washing” the web3 brand.

As one of the early scholars of the field, I agree with many of Morozov’s criticisms. I consider critics like Morozov, Golumbia, Gerard, and White to be astute in their analysis and much needed voices in a conversation that tends towards credulity. But, I’ve also found that critics sometimes paint with too broad of a brush, lumping their Bitcoiners and frens into the same lazy category. And over the years I’ve also witnessed dramatic social evolution in “the scene,” of which web3 is but one frenetic little corner. Specificity matters.

So, I decided to commit to living in web3 as an explorer in this strange new land, living about as close to the code as my lifestyle permits (no degen for me, thanks). I have been out on the DeFi farms in search of yield, I joined a chorus of Discord servers incessantly pinging with new notifications, I cruised the metaverse, bought some virtual art and property, and turned my digital wallet into a multitool for any situation. All along I maintained an open-door policy that led to dozens of conversations with dreamers, enthusiasts, hustlers, builders, and money-makers (I rounded out the haphazard selection by strategically interviewing web3 leaders and innovators). Continuing my search for the holy grail of decentralized autonomous organizations (DAOs), I also dug into the latest cryptoeconomics, blockchain-based organizational designs, and novel forms of distributed governance. I return from my web3 sojourn with measured optimism, for I found a progressive web3 rich with innovative ideas, designs, technologies, and maybe even a progressive spirit too.

In this essay, I’m ultimately describing progressive design goals, but Morozov says we need to address the lack of “engagement with the political economy of global capitalism.” So let’s do that. We can start by problematizing the role of the nation state.

Now a decade since the invention of Bitcoin, I’m surprised daily at how a faddish 1990s-era cypherpunk ideology has managed to reify itself into technologies that now offer nascent social infrastructures—platforms—for life “without” a nation state. Cypherpunk, Solarpunk, or not, it is possible, perhaps likely, for web3 to exist independently of the state—to make a land with no government. This does not mean web3 will be independent of the nation state, even Bitcoin isn’t, but the technological trajectory is pretty clear. Nonetheless, this life isn’t for everyone: for some people, living in a land where “code is law” sounds both unrealistic and risky, borderline scary. One web3 champion, Tracheopteryx, describes this new progressive vista as “confronting.” This is the gambit of a progressive web3: that through technology, culture, and economics we have powerful new tools to design the future of progressive social movements.

To this end, Graeber and Wengrow’s recent book (2021) reminds us to think beyond the inevitability of Hobbesian and Rousseauian political theory and its claim to Westphalian states, to rather dream of new organizational forms capable of supporting human flourishing. Utopia aside, a progressive web3 starts with people meaningfully self-organizing, which means good governance is essential.

Of course, these critics know this history of crypto as well as I do. We all know that crypto shook awake national governments because it threatened taxation and economic sovereignty [1]. The neoliberal state responded as best it could by opening vast regulatory mechanisms, which in turn accelerated private and public investment in—well, not exactly the radical technology promised by Bitcoin, but a sanitized, rentier version with well monitored on and off ramps (an intelligence agent once joked to me that crypto is just “prosecution futures”). And so, in the subsequent years the radical spirit of crypto has been all but smothered by the warm embrace of the state. In its place a booming Silicon Valley brogrammer culture emerged and infected everything good and holy in the critic’s imagination of an open Internet—incidentally, not the Internet that was actually developed by the US state and military for intelligence, surveillance, and the global spread of American values [2].

Thus, one history of web3 starts with the opportunistic labeling of a technological evolution of computer networking towards a regulated (state monitored) infrastructure for the exchange of value. This technological evolution implies that the political economy of web3 is defined by money—or a liquid kind of value—that is exchanged on a programmable network at a supranational scale (Swartz, 2020). But importantly web3 is a programmable money, having the characteristics of an “immutable mobile” because it enables “both mobilization and immutability… at the same time” (Latour, 1986 p.10). Like the Internet and dozens of other (notational) technologies before it, blockchain technology is mobile because it supports the circulation of value (an economy) [3] and is immutable because transaction records are accepted as authoritative. This distinction is not just an academic curiosity—immutable mobiles are important because they serve to convince, exhibiting the same influence as maps and books did for earlier media. One of the most important consequences of blockchain technology is that it makes things visible (DuPont and Maurer, 2015)—so that, as Latour offers, “no matter how inaccurate these traces might be at first, they will all become accurate just as a consequence of more mobilization and more immutability” (Latour, 1986 p.12). Latour’s insight shows why any reasonable account of the political economy of web3 must accept that materialist explanations cannot “kneel before one specific science, that of economics” (Latour, 1986 p.3).

In this essay I offer a map—my map—for a progressive web3. Over the last year I’ve been deeply influenced and humbled by the groundswell of progressive web3 efforts that have emerged—like Gitcoin’s quadratic cryptoeconomics, Common Stack’s bonding curves, Metagov’s or Gnosis Guild’s explorations of polycentric governance, Tribute Lab’s open legal framework, and Colony’s DAO tooling. I depart from other theorizations of web3 insofar as I situate web3 technologies in the discourse of non-state governance and apply lessons from social movements with the design goal of social coproduction. [4]

But before turning to a reading of social coproduction, I first discuss the real challenges a progressive web3 faces. I attempt to give the criticisms a fair airing and I do not presume to have any of the answers, but I do try to avoid factitious mud-slinging maximalism, and I don’t bemoan how broken governance models have doomed Bitcoin (and so many others), and I certainly don’t feign surprise that some people are hucksters, shitcoiners, and scam artists. As best I can, here’s my honest appraisal, in miniature, of a significant, ongoing socio-technical evolution and a map for how a progressive web3 might be possible.

Some critics still think crypto is a scam. Aside from being woefully uninformed about the preceding decade’s history of crypto successes, challenges, and disasters, this view fails to register the meaningful and real issues with web3 and instead focuses on outdated criticisms of technology, regulation, and culture.

Crypto’s first decade has demonstrated that technological, regulatory, and cultural challenges are surmountable but require effective social embedding. For example, the heartbreaking environmental impact of Bitcoin could be fixed if it was more thoroughly embedded in a dynamic organizational structure capable of leadership and effective change management. Indeed, many modern blockchains have moved on from energy-intensive proof of work consensus mechanisms, adopting proof of stake or truly next-gen PBFT protocols that use robust sub-sampling and sortition techniques for leaderless consensus in permissionless networks (e.g., Algorand, Avalanche, Cardano, EOSIO, Stellar, and Tron). Likewise, while the regulatory and legal landscape continues to evolve, crypto is no longer the state’s bogeyman. Between novel uses by traditional financial institutions, e-government, and blue chip sectors, crypto has become an inextricable part of dominant capital (crypto’s recent move from periphery to core seems to be fueling another set of reappraisals by the Left, like Morozov’s). And finally, for better or worse, crypto is no longer characterized by a monolithic culture of white, libertarian men—now

Similarly, many of the “old” arguments against Bitcoin no longer meaningfully apply to web3. David Golumbia’s trenchant analysis of Bitcoin comes up short today because his critique focuses on Bitcoin’s anti-inflation economics, early enthusiast’s weird banking conspiracy theories, and the difficulty of fitting Bitcoin into the standard tripartite model of money. New crypto inherits none of these issues: novel and sophisticated token engineering in DeFi is the norm, depressingly few of the people adopting crypto today are even aware of Bitcoin’s unsavory political past, and I think it is obvious that crypto doesn’t fit in the standard definition of money because it is an evolution of the very idea of money. David Gerard is another vocal critic and expands Golumbia’s critique by focusing on technical and usability issues. Some of these issues remain (e.g., sustainable business models are still wanting), but next-generation blockchain platforms have largely resolved the issues that Gerard focused on or have engineering roadmaps for their solution. With software, technological criticisms are usually addressed in version upgrades.

Even though the old criticisms no longer apply, some issues facing web3 are more difficult and cannot be “fixed” through better engineering or finer government control. These are the existential risks facing crypto but, I believe, also the opportunity for a progressive web3. As I see it, there are three related risks: 1) financialization, assetization, and quantification, 2) commodity fetishism, and 3) digital inequality.

This assemblage of issues is intimately related to modern economics and the impact of computing—which is obviously not unique to web3 but is often—callously—celebrated within its culture. Zook and Grote describe crypto financialization as an endogenous change to financial institutions that results in the increasing prevalence of monetary and financial considerations by way of the “cultural process through which individuals are reimagined as investors” (2020). More generically, Birch and Muniesa describe assetization as the dominant form of technoscientific capitalism, marking a movement away from commodities formerly grounded in a material reality. In both descriptions, the technosocial processes of financialization and assetization result from the circulation of value which requires a prefigured quantification of things (i.e., blocks of meaning indexed to code). These are, of course, not new issues. Arguably, quantification arose out of the Weberian processes of organizational rationalization that complemented bureaucratization and which ultimately took the form of computer “preprocessing” (Beniger, 1986 p.15).

In an already fair and just society, financialization, assetization, and quantification don’t pose any really troubling ethical issues, but when these “logics” are embedded into real systems they have the power to dramatically change social relations, and not necessarily for the better. These are also the consequences of the failed efforts to depoliticize money, and such failures illustrate the ways that algorithmic control (still) cannot autonomously control macroeconomic forces. [6]

Moreover, these issues are not exclusively “economic” and may also apply beyond cryptocurrencies to social relations in web3. In an astute analysis, the artist Geraldine Juarez echoes Morozov’s worries that even well-intentioned “DAOs are text-book [examples of] assetization as they manifest the imperative of investment as a social relation.” The blurring of work by technologies like DAOs extends the issues of financialization, assetization, and quantification to all social realities. Ultimately, I suppose the worry is that, like King Midas, everything a DAO touches turns to gold.

Commodity fetishism is an old Marxist concern emerging out of a labour theory of value. The concern with commodity fetishism is that when people come to believe an economic abstraction (value) is to be found in an object they often but mistakenly come to think the object has intrinsic value. Marxists reject this idea because it contradicts their belief that value originates in labour, as part of use-value in exchange. According to John Holloway’s (2010) re-reading of commodity fetishism— “the core of Marx’s discussion of power”—social relations of labour are presented as fungible commodities measured by price. Commodities are hostile and antagonistic, “devourers of living labour” according to Marx (1990 [Capital Volume 1], 558), simultaneously illusory and efficacious. The alienation that results obfuscates the social character of commodities and separates the subject from the object, such that those who have ownership of objects have power over subjects.

More broadly, Marx’s original theory of commodity fetishism emerged from his sociological interests in religion, which he famously thought was “the opium of the people.” Marx’s criticism of those who worship at deities and gold is echoed by David Golumbia, who argues that crypto works like a cult insofar as “belief in Bitcoin is viciously circular, self-justifying, wildly metaphoric, and difficult if not impossible to link to fact.” In simpler words, commodity fetishism is an accusation that crypto’s cultish followers are alienated and irrational.

If commodity fetishism arises from insufficient rationality, Nick Szabo’s pioneering work on smart contracts (1997) might be an example of taking “rationality” too far. Szabo’s early contributions to secure protocols offered the idea of “vending machine” fairness with low transaction costs, high “observability,” and automatic execution. A smart contract, Szabo argued, is like a vending machine—all interactions are secure, automatic, and fair. He imagined how contractual clauses “can be embedded in the hardware and software” to make breach of contract nearly impossible.

However, “fair” does not automatically produce equality or justice. Vending machine fairness has proven useful for a small—but important—set of human relations, for example, DeFi is built on this promise and has successfully eliminated online counterparty risk. But web3 is much bigger than DeFi; it promises hypergovernance, virtual social relations, and new kinds of work and play. For these richer experiences, often embedded in Decentralized Autonomous Organizations (DAOs) today, critics rightly argue that social relations built on market-like, “vending machines” may actually exacerbate inequality and stymie the development of a just web3 society.

— end of part 1 —

[1] Skylar Brooks’ Bank of Canada report “Revisiting the Monetary Sovereignty Rationale for CBDCs” offers a recent and rich description of the real economic threats crypto poses to nation states.

[2] See Levine’s Surveillance Valley: The Secret Military History of the Internet or DuPont and Fidler (2016) “Edge Cryptography and the Codevelopment of Computer Networks and Cybersecurity.”

[3] Foucault links circulation of value (grain, specie, gold, etc.) to the emergence of the “apparatus of security.” Whereas “discipline regulates everything,” the apparatus of security “lets things happen” by discriminating between “details that are not valued as good or evil in themselves, that are taken to be necessary, inevitable processes… .” See Foucault’s 1977-78 lectures at the Collége de France, published as Security, Territory, Population.

[4] Social coproduction is a term used by Hardt and Negri, who are autonomist Marxists. Wikipedia provides a useful summary of autonomist values; from Katsiaficas, “In contrast to the centralized decisions and hierarchical authority structures of modern institutions, autonomous social movements involve people directly in decisions affecting their everyday lives, seeking to expand democracy and help individuals break free of political structures and behavior patterns imposed from the outside.”

[5] As crypto expands globally and reaches all demographics, critics ought to worry about exploitation, especially in gamified web3 environments where powerful behavioural mechanisms are essential to gameplay.

[6] But not all cryptocurrencies aim at depoliticization. For example, according Varoufakis, CBDCs are an attempt to repoliticize money.

**Preprint** to appear in Defining Web3 (DuPont, Dylan-Ennis, and Kavanagh, 2022)

Now, should we trust these people, no matter how well-intentioned they might be, to guide society into the future, … I’d say “no.”

~ Evgeny Morozov, “Web3: A Map in Search of a Territory”

In a recent essay, Evgeny Morozov offers a critical biography of web3 by tracing its popular rhetoric through Tim O’Reilly and Marc Andreessen. Inhabiting the spirit of arche-critic David Golumbia, he discovers vast “linguistic and analytical pollution” in web3, underpinned by opportunistic hustlers. He accuses web3 advocates of self-referentiality and performativity, questioning whether web3 is even a meaningful analytical concept. The issue, Morozov emphasizes, is not that “web3” or “metaverse” are poorly defined words (though they might be), nor that some “academic, intellectuals, and policy experts… [will] accept cash for lending their names and reputations” (they have), rather, the value of even “well-intentioned” web3 projects is pretty much nothing (“it’s spin all the way down,” Morozov chides). Worse still, these well-intentioned rubes act like capitalism’s yeomen and are basically responsible for “left-washing” the web3 brand.

As one of the early scholars of the field, I agree with many of Morozov’s criticisms. I consider critics like Morozov, Golumbia, Gerard, and White to be astute in their analysis and much needed voices in a conversation that tends towards credulity. But, I’ve also found that critics sometimes paint with too broad of a brush, lumping their Bitcoiners and frens into the same lazy category. And over the years I’ve also witnessed dramatic social evolution in “the scene,” of which web3 is but one frenetic little corner. Specificity matters.

So, I decided to commit to living in web3 as an explorer in this strange new land, living about as close to the code as my lifestyle permits (no degen for me, thanks). I have been out on the DeFi farms in search of yield, I joined a chorus of Discord servers incessantly pinging with new notifications, I cruised the metaverse, bought some virtual art and property, and turned my digital wallet into a multitool for any situation. All along I maintained an open-door policy that led to dozens of conversations with dreamers, enthusiasts, hustlers, builders, and money-makers (I rounded out the haphazard selection by strategically interviewing web3 leaders and innovators). Continuing my search for the holy grail of decentralized autonomous organizations (DAOs), I also dug into the latest cryptoeconomics, blockchain-based organizational designs, and novel forms of distributed governance. I return from my web3 sojourn with measured optimism, for I found a progressive web3 rich with innovative ideas, designs, technologies, and maybe even a progressive spirit too.

In this essay, I’m ultimately describing progressive design goals, but Morozov says we need to address the lack of “engagement with the political economy of global capitalism.” So let’s do that. We can start by problematizing the role of the nation state.

Now a decade since the invention of Bitcoin, I’m surprised daily at how a faddish 1990s-era cypherpunk ideology has managed to reify itself into technologies that now offer nascent social infrastructures—platforms—for life “without” a nation state. Cypherpunk, Solarpunk, or not, it is possible, perhaps likely, for web3 to exist independently of the state—to make a land with no government. This does not mean web3 will be independent of the nation state, even Bitcoin isn’t, but the technological trajectory is pretty clear. Nonetheless, this life isn’t for everyone: for some people, living in a land where “code is law” sounds both unrealistic and risky, borderline scary. One web3 champion, Tracheopteryx, describes this new progressive vista as “confronting.” This is the gambit of a progressive web3: that through technology, culture, and economics we have powerful new tools to design the future of progressive social movements.

To this end, Graeber and Wengrow’s recent book (2021) reminds us to think beyond the inevitability of Hobbesian and Rousseauian political theory and its claim to Westphalian states, to rather dream of new organizational forms capable of supporting human flourishing. Utopia aside, a progressive web3 starts with people meaningfully self-organizing, which means good governance is essential.

Of course, these critics know this history of crypto as well as I do. We all know that crypto shook awake national governments because it threatened taxation and economic sovereignty [1]. The neoliberal state responded as best it could by opening vast regulatory mechanisms, which in turn accelerated private and public investment in—well, not exactly the radical technology promised by Bitcoin, but a sanitized, rentier version with well monitored on and off ramps (an intelligence agent once joked to me that crypto is just “prosecution futures”). And so, in the subsequent years the radical spirit of crypto has been all but smothered by the warm embrace of the state. In its place a booming Silicon Valley brogrammer culture emerged and infected everything good and holy in the critic’s imagination of an open Internet—incidentally, not the Internet that was actually developed by the US state and military for intelligence, surveillance, and the global spread of American values [2].

Thus, one history of web3 starts with the opportunistic labeling of a technological evolution of computer networking towards a regulated (state monitored) infrastructure for the exchange of value. This technological evolution implies that the political economy of web3 is defined by money—or a liquid kind of value—that is exchanged on a programmable network at a supranational scale (Swartz, 2020). But importantly web3 is a programmable money, having the characteristics of an “immutable mobile” because it enables “both mobilization and immutability… at the same time” (Latour, 1986 p.10). Like the Internet and dozens of other (notational) technologies before it, blockchain technology is mobile because it supports the circulation of value (an economy) [3] and is immutable because transaction records are accepted as authoritative. This distinction is not just an academic curiosity—immutable mobiles are important because they serve to convince, exhibiting the same influence as maps and books did for earlier media. One of the most important consequences of blockchain technology is that it makes things visible (DuPont and Maurer, 2015)—so that, as Latour offers, “no matter how inaccurate these traces might be at first, they will all become accurate just as a consequence of more mobilization and more immutability” (Latour, 1986 p.12). Latour’s insight shows why any reasonable account of the political economy of web3 must accept that materialist explanations cannot “kneel before one specific science, that of economics” (Latour, 1986 p.3).

In this essay I offer a map—my map—for a progressive web3. Over the last year I’ve been deeply influenced and humbled by the groundswell of progressive web3 efforts that have emerged—like Gitcoin’s quadratic cryptoeconomics, Common Stack’s bonding curves, Metagov’s or Gnosis Guild’s explorations of polycentric governance, Tribute Lab’s open legal framework, and Colony’s DAO tooling. I depart from other theorizations of web3 insofar as I situate web3 technologies in the discourse of non-state governance and apply lessons from social movements with the design goal of social coproduction. [4]

But before turning to a reading of social coproduction, I first discuss the real challenges a progressive web3 faces. I attempt to give the criticisms a fair airing and I do not presume to have any of the answers, but I do try to avoid factitious mud-slinging maximalism, and I don’t bemoan how broken governance models have doomed Bitcoin (and so many others), and I certainly don’t feign surprise that some people are hucksters, shitcoiners, and scam artists. As best I can, here’s my honest appraisal, in miniature, of a significant, ongoing socio-technical evolution and a map for how a progressive web3 might be possible.

Some critics still think crypto is a scam. Aside from being woefully uninformed about the preceding decade’s history of crypto successes, challenges, and disasters, this view fails to register the meaningful and real issues with web3 and instead focuses on outdated criticisms of technology, regulation, and culture.

Crypto’s first decade has demonstrated that technological, regulatory, and cultural challenges are surmountable but require effective social embedding. For example, the heartbreaking environmental impact of Bitcoin could be fixed if it was more thoroughly embedded in a dynamic organizational structure capable of leadership and effective change management. Indeed, many modern blockchains have moved on from energy-intensive proof of work consensus mechanisms, adopting proof of stake or truly next-gen PBFT protocols that use robust sub-sampling and sortition techniques for leaderless consensus in permissionless networks (e.g., Algorand, Avalanche, Cardano, EOSIO, Stellar, and Tron). Likewise, while the regulatory and legal landscape continues to evolve, crypto is no longer the state’s bogeyman. Between novel uses by traditional financial institutions, e-government, and blue chip sectors, crypto has become an inextricable part of dominant capital (crypto’s recent move from periphery to core seems to be fueling another set of reappraisals by the Left, like Morozov’s). And finally, for better or worse, crypto is no longer characterized by a monolithic culture of white, libertarian men—now

Similarly, many of the “old” arguments against Bitcoin no longer meaningfully apply to web3. David Golumbia’s trenchant analysis of Bitcoin comes up short today because his critique focuses on Bitcoin’s anti-inflation economics, early enthusiast’s weird banking conspiracy theories, and the difficulty of fitting Bitcoin into the standard tripartite model of money. New crypto inherits none of these issues: novel and sophisticated token engineering in DeFi is the norm, depressingly few of the people adopting crypto today are even aware of Bitcoin’s unsavory political past, and I think it is obvious that crypto doesn’t fit in the standard definition of money because it is an evolution of the very idea of money. David Gerard is another vocal critic and expands Golumbia’s critique by focusing on technical and usability issues. Some of these issues remain (e.g., sustainable business models are still wanting), but next-generation blockchain platforms have largely resolved the issues that Gerard focused on or have engineering roadmaps for their solution. With software, technological criticisms are usually addressed in version upgrades.

Even though the old criticisms no longer apply, some issues facing web3 are more difficult and cannot be “fixed” through better engineering or finer government control. These are the existential risks facing crypto but, I believe, also the opportunity for a progressive web3. As I see it, there are three related risks: 1) financialization, assetization, and quantification, 2) commodity fetishism, and 3) digital inequality.

This assemblage of issues is intimately related to modern economics and the impact of computing—which is obviously not unique to web3 but is often—callously—celebrated within its culture. Zook and Grote describe crypto financialization as an endogenous change to financial institutions that results in the increasing prevalence of monetary and financial considerations by way of the “cultural process through which individuals are reimagined as investors” (2020). More generically, Birch and Muniesa describe assetization as the dominant form of technoscientific capitalism, marking a movement away from commodities formerly grounded in a material reality. In both descriptions, the technosocial processes of financialization and assetization result from the circulation of value which requires a prefigured quantification of things (i.e., blocks of meaning indexed to code). These are, of course, not new issues. Arguably, quantification arose out of the Weberian processes of organizational rationalization that complemented bureaucratization and which ultimately took the form of computer “preprocessing” (Beniger, 1986 p.15).

In an already fair and just society, financialization, assetization, and quantification don’t pose any really troubling ethical issues, but when these “logics” are embedded into real systems they have the power to dramatically change social relations, and not necessarily for the better. These are also the consequences of the failed efforts to depoliticize money, and such failures illustrate the ways that algorithmic control (still) cannot autonomously control macroeconomic forces. [6]

Moreover, these issues are not exclusively “economic” and may also apply beyond cryptocurrencies to social relations in web3. In an astute analysis, the artist Geraldine Juarez echoes Morozov’s worries that even well-intentioned “DAOs are text-book [examples of] assetization as they manifest the imperative of investment as a social relation.” The blurring of work by technologies like DAOs extends the issues of financialization, assetization, and quantification to all social realities. Ultimately, I suppose the worry is that, like King Midas, everything a DAO touches turns to gold.

Commodity fetishism is an old Marxist concern emerging out of a labour theory of value. The concern with commodity fetishism is that when people come to believe an economic abstraction (value) is to be found in an object they often but mistakenly come to think the object has intrinsic value. Marxists reject this idea because it contradicts their belief that value originates in labour, as part of use-value in exchange. According to John Holloway’s (2010) re-reading of commodity fetishism— “the core of Marx’s discussion of power”—social relations of labour are presented as fungible commodities measured by price. Commodities are hostile and antagonistic, “devourers of living labour” according to Marx (1990 [Capital Volume 1], 558), simultaneously illusory and efficacious. The alienation that results obfuscates the social character of commodities and separates the subject from the object, such that those who have ownership of objects have power over subjects.

More broadly, Marx’s original theory of commodity fetishism emerged from his sociological interests in religion, which he famously thought was “the opium of the people.” Marx’s criticism of those who worship at deities and gold is echoed by David Golumbia, who argues that crypto works like a cult insofar as “belief in Bitcoin is viciously circular, self-justifying, wildly metaphoric, and difficult if not impossible to link to fact.” In simpler words, commodity fetishism is an accusation that crypto’s cultish followers are alienated and irrational.

If commodity fetishism arises from insufficient rationality, Nick Szabo’s pioneering work on smart contracts (1997) might be an example of taking “rationality” too far. Szabo’s early contributions to secure protocols offered the idea of “vending machine” fairness with low transaction costs, high “observability,” and automatic execution. A smart contract, Szabo argued, is like a vending machine—all interactions are secure, automatic, and fair. He imagined how contractual clauses “can be embedded in the hardware and software” to make breach of contract nearly impossible.

However, “fair” does not automatically produce equality or justice. Vending machine fairness has proven useful for a small—but important—set of human relations, for example, DeFi is built on this promise and has successfully eliminated online counterparty risk. But web3 is much bigger than DeFi; it promises hypergovernance, virtual social relations, and new kinds of work and play. For these richer experiences, often embedded in Decentralized Autonomous Organizations (DAOs) today, critics rightly argue that social relations built on market-like, “vending machines” may actually exacerbate inequality and stymie the development of a just web3 society.

— end of part 1 —

[1] Skylar Brooks’ Bank of Canada report “Revisiting the Monetary Sovereignty Rationale for CBDCs” offers a recent and rich description of the real economic threats crypto poses to nation states.

[2] See Levine’s Surveillance Valley: The Secret Military History of the Internet or DuPont and Fidler (2016) “Edge Cryptography and the Codevelopment of Computer Networks and Cybersecurity.”

[3] Foucault links circulation of value (grain, specie, gold, etc.) to the emergence of the “apparatus of security.” Whereas “discipline regulates everything,” the apparatus of security “lets things happen” by discriminating between “details that are not valued as good or evil in themselves, that are taken to be necessary, inevitable processes… .” See Foucault’s 1977-78 lectures at the Collége de France, published as Security, Territory, Population.

[4] Social coproduction is a term used by Hardt and Negri, who are autonomist Marxists. Wikipedia provides a useful summary of autonomist values; from Katsiaficas, “In contrast to the centralized decisions and hierarchical authority structures of modern institutions, autonomous social movements involve people directly in decisions affecting their everyday lives, seeking to expand democracy and help individuals break free of political structures and behavior patterns imposed from the outside.”

[5] As crypto expands globally and reaches all demographics, critics ought to worry about exploitation, especially in gamified web3 environments where powerful behavioural mechanisms are essential to gameplay.

[6] But not all cryptocurrencies aim at depoliticization. For example, according Varoufakis, CBDCs are an attempt to repoliticize money.