Sometimes innovation requires building something completely new. Other times, innovation simply requires the combination of existing ideas. When creating a new country, we can employ the latter.
We have the basic building blocks that can facilitate what can been seen as the predecessor of digital countries built in the cloud, something Balaji Srinivasan calls network unions.
Network unions combine social networks, traditional labour unions, and blockchain technology. In the process, they look to align a mass of people around a defined purpose, providing power to collectively bargain as well as pool and deploy capital.
Think of it this way. If the ultimate purpose of labour unions is to collectively bargain the best outcome for employees in the workplace, network unions collectively bargain the best outcome for society outside the workplace.
Social Networks
Social networks have already proven successful in aligning a mass of people around a common purpose. However, this purpose is weak, primarily built around clicks, likes, retweets, and shares. While the current utilization of social networks may be poor, the underlying idea and innovation is extremely powerful. What if we were able to utilize the infrastructure of social networks, while also introducing a clear leader with a more valuable and defined purpose?
For this to happen, there are two questions we need to answer: i) how to define a network union purpose and ii) how to create a network union leader.
To answer these questions, the following two concepts must be introduced:
1. Economic Alignment
For these network unions to have widespread adoption, individuals must be motivated and incentivized to join. This is the purpose. Blockchains can help facilitate this within the existing social network structure.
Imagine a social network organized around an Ethereum-based ERC-20 token. Members would gain from both improved structure and functionality of the system, thus facilitating the following:
Balance: Ability to transact (buy/sell) with union members using their token balance
Crowdfunding: Ability to pool capital to finance public goods and projects on the site
Security: Using an Ethereum public/private key pair, ability to digitally sign documents, send encrypted messages, and eliminate seizure risk of tokens
Economic Upside: Greater reward for the token’s appreciation in value the earlier members join the network
2. Ideological Alignment
While economic alignment gets individuals to join the network union, ideological alignment facilitates functionality. This leads us to the creation of a network union leader. One of the key components of a labour union is a union leader, and for this you need an explicit hierarchy. As opposed to the traditional union leader appointment process through an occasional election, the hierarchy of network unions would take a different approach.
An interesting concept posed by Balaji Srinivasan would be thinking about the social network hierarchy structure in terms of backlinks. Backlinks in the traditional sense relate to the incoming links to a webpage. Using a simplified description, the greater the quantity and quality of websites that link to website A, the higher the ranking of website A in the “backlinks hierarchy”.
If we transfer this to the concept of network unions, we can quantify the voluntary support for each network union member through their associated backlinks. Ultimately, greater backlinks ranking would equate to greater seniority, with the individual(s) with the highest ranking representing the network union leader(s). Through the use of backlinks, we can have real time feedback to establish a power structure versus relying solely on occasional elections.
Labour Unions
It’s about time we reimagined how traditional unions operate. Presently, they are are focused around labour, with a clear leader negotiating on behalf of employees. But as shown above, we can go beyond this by organizing unions outside of the workplace. A union that is focused on the collective interests of society in their daily lives.
Collective Bargaining
Network unions can play two key roles in the collective bargaining process:
1. Defence
Defence can involve negotiations outside the network union with governments and businesses. Examples of defensive collective bargaining could include:
Taxes: Lower tax base
Healthcare: Improved benefits or a reduction in cost
Education: Increased subsidies or more favourable student loans
Environmentalism: Greater emphasis on environmental protection/activism
Improvement to any public good: Roads, bridges, utilities, etc.
Why would businesses or governments agree to negotiate?
Members of network unions create value for society. They are ultimately still tax-paying citizens whose voice alone may not carry weight, but as a collective can have immense impact on a local municipality or state.
A simple example I like to think about is the negotiation of a lower tax base with governments. Imagine a hypothetical scenario of 10,000 network union members who each earn an annual salary of $100k. With a tax rate of 15%, this generates $150M in annual “profit” for the state. If the network union members were to say, negotiate for taxes to be reduced by 5%, this outcome may make sense for the state government given these individuals would still contribute $100M in annual profit (versus $0 in profit if they were to leave the state given their dissatisfaction with the local government’s refusal to negotiate).
2. Offence
Offence can involve negotiations inside the network union among network union members on how capital and resources should be allocated. Examples of offensive collective bargaining could include: crowdfunding land, funding the startup of a union member, or organizing open-source projects (both associated labour and capital).
Network Unions
If we put it all together, what do we get?
- A social network with its ability to align a large mass of individuals
- Traditional unions with a defined vision, leader, and hierarchy
- Blockchain technology with its ability to economically incentivize and build upon the existing social network structure
This is the network union.
The following is a six-step thought experiment for how a real-life network union could be created. In this example, the “online community” used is 1729.com.
Step 1: Online community is formed
Step 2: 1729 network union whitepaper is released
Step 3: 1729 network union token is issued
How is initial token issuance determined?
We could use a similar format to the UNI Airdrop in which tokens are airdropped to anyone that has participated in the 1729 community (i.e. responded to a past newsletter).
Who can participate in the network union?
Going forward, participation within the network union could be determined through a proof-of-HODL model with something like a provable timelock.
Step 4: Backlinks are formed within the online community
Step 5: Hierarchy/network union leader is established
Step 6: Collective bargaining begins and strengthens as network union gains influence
Network unions are a way to provide a collective voice for individual citizens. And with that, they facilitate not only a collective voice, but a collective choice. If assembly can be achieved inside the workplace, there is no reason it cannot exist outside as well.
Through the unique combination of social networks, traditional unions, and blockchain technology, we can move closer to creating a new form of collective bargaining and a new way to form a country.
Matthew J. Gilmour
Thoughts, comments, disagreements welcome.
@mattjgilmour
This post was inspired by the 1729 newsletter. I’d highly recommend checking it out as well as Balaji Srinivasan’s other content.