Justice as Fairness

In this article Li Jin and Katie Parrott, questionning around the fairness of Web3. They base their analysis on the framework provide by John Rawls - A Theory of Justice.

How can we better design platforms and governance systems to promote fairness and avoid walking on the same path as Web2? What kind of internet should we be creating?

Web2 and Web3 have similar promises:

  • Empowering individual creators and removing intermediaries
  • Wrest back prower from a small number of extractive, centralized institutions
  • Everyone with an internet connection can participate

But Web2 fails on these points, and Web3 will follow a similar path if you don’t start to think about it now.

How do we decide what’s fair?

Distributive Justices, is the thought of how best to allocate resources among participants in a society or system. Several branches of thought exist:

  • Strict egalitarians: equally distributed system resources; everyone is morally equal and thus deserves to have equal access to materials and services
  • Luck egalitarians: equality of starting position; any inequalities that emerge after that point are justified by differences in merit
  • Libertarians argue: individual freedom should be the sole consideration, and any effort to redistribute resources infringes on that freedom
  • Utiliatians argue: oriented to maximize the sum of total happiness and well-being of all participants

But with these branches of thought, Freedom and Equality are often two opposing values:

  • A society in which all actors are completely free is likely to result in a significant amount of inequality. Actors differ in their motivation to pursue their purpose and will behave in ways that advance their own interests
  • A society in which actors are equal inhibits freedom since actors cannot behave in any way that causes them to be unequal to others, even if this unequality is earned through hard work or skill.

So Rawl’s shape is the theory of ‘Justice as Fairness’.

What is Justice as Fairness

Rawl’s theory is unique in how it resolves the central tension between the competing demands of freedom and equality. By requiring that inequalities benefit the least advantaged.

  1. Justice requires equal rights and liberties for every person, and that’s compatible with others also having those liberties
  2. Any social or economic inequalities that do exist in society should meet two conditions:
  • “attached to offices and positions open to all under conditions of fair equality and opportunity." A job should be open to everyone and allocated based on merit.
    The prospects for success should reflect their level of talent and willingness to use it, not their social class or background
  • any existing inequality should maximize the benefit of the last well off

The outcomes are:

  • That leaves space for builders to be rewarded for their contributions, which is necessary to incentivize smart and ambitious people to build in the ecosystem
  • It places a burden on those builders and the ecosystem as a whole to build in a way that creates opportunity for less-advantaged participants

For Web3 we currently fail to reach Rawls standard of justice in two points:

  • Web3 projects commonly issue crypto tokens as digital representations of value
  • Speculators are rewarded instead of those who are adding value to the network through actual usage

How to ensure justice as Fairness in Web3

Some general anti-principles start to come into focus:

  • Don’t build a system that only benefits the wealthy, because what if you’re poor?
  • Don’t build a system that disproportionately favors early adopters, because what if you’re not embedded in networks that give you early access to knowledge?
  • Don’t build a system that demands extreme technological savvy to succeed, because what if you don’t have the aptitude or resources to learn those skills?

Promote self-determination and agency

Unlike web2 with a holding power schema, web3 communities will be controlled by their members.

But today, early governance structures have largely instituted token-weighted voting, with the result being plutocracies. People holding power look out for their own interests.

To be aligned

  • We need to push for democratic systems of governance that give a voice to all their members, not just a select few
  • Everyone should be equally enfranchised in the systems in which they participate

Reward participation, not just capital

Value should be able to be earned, not just purchased:

  • Everyone is on an equal footing and can attain positions of power or compensation through their own merit and contributions
  • Making it possible to earn ownership through ongoing participation in networks, not just capital investment.

Incorporate initiatives that benefit the disadvantaged

With fair equality of opportunity as a prerequisite, inequality remains an inevitable outcome of people’s natural abilities and level of desire and effort to earn money.

But when inequalities do arise, do those arrangements benefit those less privileged in society?

For that, Web3 system should be incentivized to adhere to the difference principle and maximize benefit for the least well-off, since that approach maximizes attractiveness to new participants, propelling further network effects.

Institutionalization = Network Success

In this article, Mario Laul, question the fact of ‘why a particular product attains and maintains market dominance, even when technically superior alternatives are readily available?’

Many reasons exist, related to technical factors or good timing, vendor lock-in and, compatibility with existing standards.

For public blockchain networks, one important non-technological success factor is the network’s degree of institutionalization - the degree to which a particular network becomes embedded in the mental models and social practices of these stakeholders.

Examples:

  • Being the first to introduce a specific use case with a particular network, and that it would be difficult for others to compete if the association between this use case and the network became synonymous (Bitcoin as digital gold)
  • Internalized shared ideology is one of the core values of the network. This ideology, infused with collective myths, helps to maintain a sense of common purpose and sustain the network
  • The more internalized the network narrative mythology, the higher its degree of institutionalization. Thus making it more resilient against both competing networks and internal rises
  • Create an ecosystem of mutually reinforcing economic
    • professionalization among network operators and providers of infrastructure services

=> this creates an ecosystem of mutually reinforcing economic interests

  • Network effects around open-source, to attract builders and enhance the developer experience
  • Consumer habits and brand recognition via the UI, to develop trust and behavioral patterns in users
    • that also contribute to the ecosystem and network effects
  • The establishment of technical standards has high coordination costs
    • standars or often achieving by dominant market position
  • Adoption and legitimization by external institutions is a green spiral that attracts more and more newcomers with the trust of previous participants.

Conclusion: mental models and social practices are often more important for network success than technical characteristics.

I think it’s a really interesting notion to keep in mind as a founder. That can help to see where the companie is and which value they want to convey inside and outside the system.

We also can link that with Simon Sinek and the why and what is the purpose of x system or organisation.