About Law and Technological Reductionism
The true cost of decentralization
Technological Reductionism
The true cost of decentralization?
Reductionism: the position that any complex system is nothing but the sum of its parts, and that an account of it can be reduced to accounts of individual constituents.
Technological Reductionism: the attempt to divide a human-centric system into its constituent parts and to partially replace those with technology-driven processes
Tl;dr: Technology-driven disintermediation of human-centric systems comes at a cost.
**What is disintermediation?
**The term ‘disintermediation’ originated in the field of economics in order to describe the removal of intermediaries in a supply chain, commonly referred to as ‘cutting out the middlemen’. The principle of disintermediation is universal and not restricted to economic processes.
What is a human-centric system?
**What is Apomediation?
**
What is al(l)egality?
Law and its surrounding professions are at their core human-centric. This fact is resembled on two levels:
Legal norms are human-centric
**This fact may be demonstrated by continental European copyright law and how it regulates information goods. “Modern” European copyright law set out to solve one problem: how to ensure that an author is able to uphold the unique relationship that binds him to his work once its been published. The solution that is agreed upon up until today is quite unusual through the lens of modern legal (i.e. effects-based) analysis[1]: copyrighted works are at their core treated as non-economic goods, i.e. goods whose value cannot be measured in economic terms. Instead, the European justification for the protection of copyrighted works is based on moral arguments[3]. This fact has very real consequences: **in Europe, an author cannot transfer his copyright to someone else. It is virtually impossible. Instead, creators of copyrighted works can only license different economic facets of their inalienable rights to others. A license does not have the same legal qualities as a transfer of ownership.[4] For the same reasons, a complete buy-out of rights is much more prone to failure before courts because there are non-economic considerations at play. Consider § 31 a of the German Copyright Act which grants the author of a copyrighted work to revoke a licensing agreement with respect to unknown types of exploitation that might pop up during the time that usage rights have been granted. The whole reason this stipulation exists is for the author’s droit morale, his moral rights, which might be violated by the defining attributes of a novel exploitation right.
Such a non-economic interpretation of information seems familiar: we fight the opposite war in the privacy debate. In this instance, where the information about private habits, interests and other personal information is treated as an economic good by the free market[5] privacy advocates and software developers try to reclaim[2] the possession of those goods for (the good of the) users.
The difference between those two debates, is that copyright creators have unintentionally got a strong lobbying partner. Users of free* internet services have not.
- the legal profession is undertaken by humans for humans. legal reasoning is thought to be a skill requiring something equivalent to human intelligence
There is a good and a bad site to this:
Decentralizing the legal system
Recently, I have been writing about the emergence of a concept which is commonly referred to as “smart contracts”. The idea is intriguing: increase the efficiency of economic transactions by automating the execution and enforcement of the underlying contractual relationships.
Many economic transactions happen in accordance to a predetermined plan — a contract. This contract exists in two different states:
- internal to the contracting parties
- external to the contracting parties
In this emerging vision of smart contracts, the external manifestation of the contract is what’s fundamentally new:
automate contractual relationships so radically that contract execution and enforcement melt down into one
automate certain aspects of contracting, to the point where contract execution, i.e. the exchange of goods, services and money happens mostly without any need for human intervention on two ends: not only will the fulfillment of contractual obligations itself be automated but wi
In such a scheme, the need for trust between the parties is shifted onto a third party that is in charge of resolving disputes about question that lie outside the scope of the knowledge encoded within the contract itself and the contract host platform which the contract is running on.
[1] Law and economics / effects-based approach
[2] Actually, before the advertisers possessed this information, nobody possessed it. Because this kind of information has never been measured before.
[3] droit morale
[4] A license has a time-dimension. A license creates a continues obligation going forward in time, creating an omnipresent attack vector. A transfer of ownership is a one-time event and therefore less vulnerable.
[5] cf. the current evaluation of e.g. Facebook and Google stock
Exported from Medium on January 3, 2025.