Please forgive me in advance for the dramatic entry of the title, and I do not wish to confuse anyone. By DAO I do not mean anything at all esoteric or related to the Tao Te Ching or Daoist philosophy, I simply mean what web3 means, as in Decentralized Autonomous Organization.
As well, by life and death I am not referring to anything contemplative. I am referring to the life style of companies, for example Facebook and Google. Google and Facebook fear death, and this is a very serious concern, for a company to fear its own demise.
Facebook is probably one of the worst things in the world for a healthy society, yet it will not die a timely death, and it will not change its revenue model because it would mean death.
Google has created an intractable problem with global data tracking embedded into the architecture of the internet. Both Google and Facebook could get rid of the problem of online misinformation overnight. However, this would mean death.
Companies grow in size out of fear of death. In comparison “adhocracies” emerge, and then just as easily die, and then transform into new types of organizations, each new variation retains the same collapsable properties of the former.
This is a feature and not a bug of decentralized communities––in comparison would shareholders ever agree to downgrade their stock value, collapse everything, and start over from scratch?
No, and this is why web3 has remarkable distributive properties for a digital society.
What if, in comparison, Facebook or Google simply accepted death as a natural function within a healthy ecosystem, and what if shareholders were somehow rewarded for allowing Facebook to die?
If Facebook was run via decentralized “ad-hoc”, its death would be greeted, even anticipated. But corporations, like Wall Street, are not as flexible as decentralized structures can be.
Corporations resist death, fearing it–so much that society itself could collapse before Google or Facebook would ever consider it.
One interesting fact about the free market––all companies playing in one will eventually fail. In a free market, ultimately someone is left holding the bag. If death comes to all companies, why not greet it and design the collapse in the interest of society and the shareholder?
Both life and death have a lot to do with effective governance, perhaps both in nature as the Tao Te Ching might have suggested thousands of years ago, but definitely in relationship to the rise and fall of corporations and why “adhocracy” may be the ultimate empowerment of decentralized autonomous organizations, if we are talking about massively scaled organizations that can both remove bureaucracy and scale efficiency.
Adhocracy, by definition, is the opposite of bureaucracy and certainly not to be confused with autocracy. Adhocracy has been around since the 1970s, and as such, there is plenty of research into its strengths and weaknesses. Adhocracy is not a particular style of governance or organization per se; Adhocracy simply refers to the minimum organizational structure a specific purpose or task requires, and no more.
Adhocracy is naturally decentralized, however it is not attached to any particular management or deliberative process. It could include voting, or even an executive director, it just depends on what is necessary. For the purpose of the task, the adhocracy would maintain whatever governance was necessary and then when the task is completed, the form of governance managing it dissolves, and the individuals and assets involved simply move on, potentially to form another adhocracy, for a different purpose.
Adhocracy proper is great to study because it pre-dates the blockchain and already has a lot of research supporting it since the 1970’s.
Wikipedia’s overview of the term tells us: “Robert H. Waterman, Jr. defined adhocracy as “any form of organization that cuts across normal bureaucratic lines to capture opportunities, solve problems, and get results”. For Henry Mintzberg, an adhocracy is a complex and dynamic organizational form. It is different from bureaucracy; like Toffler, Mintzberg considers bureaucracy a thing of the past, and adhocracy one of the future. When done well, adhocracy can be very good at problem solving and innovations and thrives in a diverse environment. It requires sophisticated and often automated technical systems to develop and thrive.
Adhocracy has been studied enough to determine that it is excellent for things like task forces, but adhocracies fall into a problem when they emerge within corporate structure and the problem is corporate structure itself. Adhocracy is only effective when its organization serves a purpose, but after the purpose is served? It dissolves.
But corporations do not like dissolving. Nor do government institutions. Nor do currencies. Corporations, like humans, fear death, and all corporations, like humans, eventually die like all currencies eventually collapse. While Milton Friedman was quick to argue that “greed was good” for economic prosperity; nature is quick to remind him that death is far better.
The problem in a corporate setting is the same as a governmental agency or institution; individuals and roles stay–even if they have resolved their purpose. The individuals, naturally wanting to keep their jobs, become part of the bureaucracy.
Take Google, for example. I believe they began as a very well intentioned company. I also deeply admired Google for most of their early history; however we see now how Google has built an entire infrastructure upon the acquisition of data in a manner that is simply not sustainable for western society.
Now Google is terrifying. Facebook is far worse. Google probably would change if it could, but it can’t.
The scale and size of Google’s total wealth, reach and the entire corporate structure it inhabits would never allow Google to “die” as it allows its current infrastructure to go extinct because that would mean the extinction of Google and its shareholder value.
Yet, the entire infrastructure of what Google has created could literally lead to the collapse of western society as we understand it, and under such terms, western society at the same time would not allow Google to collapse.
Wall Street would not adjust its measurements and valuations of Google’s assets, andGoogle’s shareholders are not required to be responsible for the upkeep of western civilization; they just want their value to increase.
After all, that is the purpose of a corporation, to make more money, even at the expense of society itself. And all of this because there is nothing in governance or organizational structure that will allow for a company to die when it is time to die, die when it no longer serves its original purpose. The bigger Google grows, the larger and larger its bureaucracy will naturally come to be, and the bigger it grows, the less likely it will be that it will ever die.
That, in principle, Google could outlive western civilization as we know it today gives one pause as to the unintended consequences of any system.
This is bureaucracy: it is inefficiency. Imagine instead if Google was not a giant conglomerate, but a DAO that allowed for adhocracy to flourish.
This means that Google could let itself die, and be re-born again, with the same individuals, even the same wealth, but with a new purpose, and a new project.
Companies, like all things in nature, need to die when the time is right and this refusal to accept the reality of the eventual demise, becoming “too big to fail”, is something I believe DAOs will be able to change at a scale previously unimaginable.
Adhocracy built into smart contracts and DAO structures would allow a natural process of company birth and death without destroying the lives of individuals that make up the company and the shareholders or the economy of the nation that it inhabits.
Adhocracies need to be born with purpose, and die when their purpose is completed.
And with smart contracts instead of a corporate structure, a DAO can allow for the rise and fall of adhocracy within a distributed environment. This is exactly how the DAO of Big Mother will operate as a decentralized autonomous direct action organization, and I look forward demonstrating how all of this works in real time.