Decentralized finance: Is it time to return to the Articles of Confederation?

A decentralized payment system and the money that runs on top of it requires a public administration that is more people-based than the system of public administration Americans have today. 

Since 2007, Americans have been witnessing an exponential shift in the structure of the political economy where large private and public corporations (government) have been experimenting with ways to streamline employee functions while loading more operational and quasi-management functions unto individual employees.

Meanwhile, these corporations, particularly large corporations, have become bigger and executive power increasingly centralized.  In the larger political economy, we have seen centralization in the banking system not only with the advent and growth in importance of the Federal Reserve System but also in the Executive Office of the President where over the past 245 years the power of decision has moved from the common person to the Congress to the executive branch.

I believe there is a battle of two major narratives occurring over the issue of how best to manage society; to manage human beings.  The first narrative, as espoused by increased centralization, is that society is best managed through two major funnels, corporations and large government.  In a democratic-corporate system, resources are extracted, managed, processed, and delivered by private corporations chartered by government pursuant to an agreement that private corporations will encourage taxable, transactional activity and in return keep profits as income.

Private corporations maintain their oligopoly by persuading government that this form is the most efficient at managing resources while contributing to maintaining the peace.  By employing labor and selling to labor the very fruits of their work i.e., goods and services, the corporate model sells the aspirational narrative of moving ahead and creating a stable quality of life in return for your allegiance to the corporation in the form of hard work.

The second narrative is that humans are best managed when they manage themselves.  While the democratic-corporate model conjures up “The Truman Show”, the voluntarist-self sufficiency model argues that people do much better when they manage their own resources and capital and enter into relationships or strategic partnerships on a volunteer basis, particular when such relationships serve their self-interests.

Whereas in a democratic-corporate system humans are connected by and transact in a government-central bank authorized and issued money, distinct monies are issued by the individual in a voluntarist-self sufficiency model where the demand and supply for such distinct, individual money is determined by a market that recognizes the unique knowledge and data held by the individual or the individual household issuing the money.

The democratic-corporate model is a coerced federation model while the voluntarist-self sufficiency model is a confederation model.  It is a model made up of allies and one that operates better in a decentralized financial system where the emphasis, again, is based on individual value.

As I allude to in the title, an appropriate public administration structure for a voluntarist-self sufficient society may be one governed by an articles of confederation.  If you read the Articles of Confederation agreed to by the Congress in November 1777, you see a document where the majority of government power laid in the hands of a limited congress that left in the hands of a very limited executive the day-to-day administration of interstate infrastructure.  States were independent sovereigns and allies in the interstate administration of commerce and trade.  The independence of the states was stressed throughout the Articles.

Can we, as individuals, enter into our own “articles of confederation” with each other?

Can we re-visit this model and do some work to bring it up to speed with a society that, while digitally connected, at the same time enjoys a technology that allows each individual to generate their own value and thus issue an individual money that reflects that energy?

Alton Drew

6 April 2022

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Disclaimer: The above is provided for informational purposes and should not be construed as financial or legal advice or as creating an agreement to provide financial or legal advice.