Blockchain Networks Are Bureaucracies Par Excellence

Introduction

In an earlier post, I likened decentralized networks to fields — social arenas of symbolic and material production in which interested actors compete and cooperate over network-specific resources.

What is a bureaucracy?

Both in public and private settings, the word bureaucracy refers to a form of organization that’s anchored in written, impersonal rules aimed at maximal procedural efficiency.

  1. Supremacy of these abstract rules over individual preferences
  2. Functional specialization, i.e. a clear division of roles
  3. Regular and continuous execution of assigned tasks
  4. Impersonal authority and treatment
  5. Open meritocracy, no favoritism
  6. Political neutrality

What’s bureaucratic about blockchain governance?

Given that the defining feature of a bureaucratic organization is protocol, i.e. the rules and procedures governing its operations and the handling of the information that it administers, the idea that blockchains are bureaucracies should strike no one as far-fetched.

The bigger picture

Historically, the full deployment of a general purpose technology such as mechanization or electricity has resulted in the emergence of organizational standards native to their era — a new normal way of doing things. [2]

Building a silicon cage

Weber saw bureaucratization as part of a more general trend in Western culture — the gradual rationalization of all spheres of social existence, i.e. the replacement of traditional norms and values with rational calculation and management under legitimate legal authority.

Concluding thoughts

As with most technology, the appropriate adjective to describe the effects of bureaucratic decentralization and automation is “ambivalent”. Having machines take care of routine and mundane tasks is a good way to tackle some of the problems that have historically plagued human institutions. But it comes with some old, new and yet unknown strings attached.

References

[1] Weber, M. (1922). Bureaucracy. From H.H. Gerth and C. Wright Mills (eds.), Max Weber: Essays in Sociology (pp. 196‐266). Oxford University Press. Available here.