NEXT: What If Organizations Could Run Themselves?
Those who have been championing blockchain have imagined a myriad of applications beyond cryptocurrency. Recall that a blockchain is a kind of open, digital ledger that is being used to record and verify transactions, and is the technology that makes Bitcoin possible. There are advocates who wish to see blockchain used for other purposes, such as a way to organize democratic elections. There has been another idea that has captured my attention: what if something like blockchain were applied to the very idea of an organization itself.
Some proponents are calling for the creation of a “decentralized autonomous organization,” or DAO. One definition for a DAO is “a business or organization whose decisions are made electronically by a written computer code or through the vote of its members. In essence, it is a system of hard coded rules that define which actions an organization will take.”
When such an organization is formed, the process of automation would mean more than AI taking over a task or even a job itself. Whole systems could be similarly automated, the organization itself becoming a kind of autonomous intelligence.
The economist Ronald Coase wrote a famous article in the 1930s that described “the theory of the firm.” He asked, when there is a market mechanism in operation, why do we need firms? His answer was that firms marshaled resources and connected people in a more effective way than the free market. Under conditions of a perfectly free market, there would, theoretically, be no need for firms. But, because markets are imperfect, firms have been formed to correct that problem.
A DAO could be a new kind of firm, a new type of organization that can marshal resources, make decisions, and create value. In theory, because it is autonomous, a DAO would not need a CEO or corporate bureaucracy: in many ways, the organization would be as automated as many of the jobs being threatened by automation.
There would still be people present in the organization, of course, but the decision-making executive hierarchy would be made redundant. Artificial intelligence—already replacing many jobs and tasks—would similarly replace the need for the corporation as we have understood it.
In theory, an entrepreneur or a group of shareholders might set up a DAO, thus reducing the number of executives needed to run the enterprise. If the organization were also connected to artificial intelligence or robots in the making of products on the provision of services, then such an organization might be largely bereft of human employees.
IBM, among other companies, is imagining the implications of the Internet of Things for the factory, calling the new systems “Industry 4.0.” Factories are becoming more autonomous; indeed, “the very core Industry 4.0 includes the (partial) transfer of autonomy and autonomous decisions to cyber-physical systems and machines, leveraging information systems.”
A DAO is the extension of this idea from factories to organizations of any kind. Eventually, a DAO might hum along largely independently of people or human decisions, running instead on programs and algorithms. The DAO would, nevertheless, produce value that would accrue to (at least some) human beings.
The creation of such an autonomous organization has lots of disquieting implications, of course. Many people rightly feel that corporations already run amuck, are not sufficiently accountable, make decisions that cause harm to the environment, and rob people of dignity and justice.
Can a DAO, an algorithmically-run organization, exhibit accountability? Will accountability or environmental- and social-justice be encoded into the rules that govern such an organization? The ideas that “Corporations are People” takes on new meaning and significance. In the same way that we are asking about the legal and ethical culpability of autonomous vehicles, for example, will the law similarly ask if an autonomous organization can be held liable?
It strikes me that a DAO would not need to be a profit-seeking corporation. A non-profit might also be established in this way, its mission codified in the algorithms that define the organizations. A city as an organization might also be made so “autonomous.”
Columbus has just been identified as a “smart city” by virtue of the grants we’ve received to start building an autonomous transportation infrastructure. What if that initiative grew to encompass the entirety of the city and many of its functions? The blockchain company Ethereum has already written the code for a algorithmically-enabled democratic decision-making process: go to ethereum.org/dao to see the code yourself. A city like Columbus could establish this practice as a central feature of its governance.
With a large enough database and sensors gathering a large and varied amount of data, Columbus could get real time, actionable information from across the city. Algorithms might then make decisions about snow removal, for example. Sensors would determine when a certain snow level is reached and deploy a fleet of autonomous snow removal vehicles. Sanitation and trash removal similarly might work via autonomous vehicles dispatched via a master algorithm. We’ve seen the advances Boston Dynamics and other companies have made in robotics, and I’ve written previously about the citizenship and personhood of Sophia the robot.
In the city-as-DAO scenario, police and fire services might be performed by robots. In theory, the city itself could provide the kinds of hard infrastructure services residents expect, only without a bureaucracy.
If a city like Columbus were to transform into a DAO, does that mean we would no longer require a mayor or a City Council? More than just a smart city, Columbus could become the first Autonomous City.
It would be the ultimate irony, of course: the same executives who have been unleashing job-killing artificial intelligence applications may one day be made redundant themselves by a new kind of technologically-mediated organization.
The next Columbus Futurists monthly forum will be Thursday, May 24 at 6:30 p.m. at the Panera Bread community room (875 Bethel Rd.) Our topic for the evening will be “The Future of Global Pandemic.”
The next CreativeMornings Columbus will be Friday, May 18 at 8:30 a.m. at The Goat RiverSouth. Dennis & Denise Blankemeyer will speak on the theme “Commitment.”