Industrial Revolutionizing of Social Contract: 4.0 Generation Prospects

Visio Journal 7, web
Visio Institute

For a “materialistic” person, the social contract is a bizarre “mental” product, close to alien/UFO mythologies: many people complain that they found themselves speaking of it without ever seeing it. Frustratingly, it is supposed to have been signed before being spoken of. On top of that, it was presumably sealed before being properly signed.

Described (as well as prescribed) by generations of theorists as a (necessary) agreement between the ruled or between the ruled and their rulers, defining the rights/liberties and duties/obligations of each, the social contract is a functional fiction that maintains human society lawful and orderly. In addition to the stress tests (passed and failed, across times and territories) due to the vagaries of the human nature, the imprint of technological (r)evolutions on the social contract is intriguing.

Does technology smoothen or rather sharpen the imbalanced positions of the “signatory parties”? What about enforceability? Or about legitimacy? The present paper delves into this techno-political topic with the lenses of the political economist.

Firstly, an outline of the core conceptions regarding the social contract theory and its crossroads with the perspectives on direct versus representative democracy is made. At this very junction reside the assessments on both the righteousness and the practicality/efficiency of the social order. Secondly, the inquiry continues with surveying the impact of the waves of industrial/technological shifts upon the general social behavior and related political processes. The main costs and benefits that economically digested technologies imposed on the democratic life are then noted.

Thirdly, the analysis ends up with investigating the capacity of the Fourth Industrial Revolution, with its information processing and communication toolkit, not only to be more inclusive for the citizen, yet in weak democratic routines, but to reset and start anew an empowering social contract.

Introduction

The “egg-and-chicken” problem when, for instance, reasoning on and ruminating about the history-long and worldwide plethora of technological shifts/rifts/drifts and social/political/economic realities is secondary to a principal obviousness: these two dimensions of the human(e) existence are involved in a co-evolutionary relationship, implying mutual and bi-directional causes and effects.

Hence, defining (or decreeing) the “technological” as the independent variable and the “socio-” as the dependent one, or perhaps vice versa, solely provides the scholar with insights onto limited segments from what it is, yet, a continuum; but, for the scientist, understanding each and every modest and simple link gets them closer to the underpinnings of the mega-complex chains of events. Studying Industrial Revolutions’ (IR) imprint onto the functioning of polities is such a link, a compound of the chain of capturing the practical means which get us closer to our principled ends.

Problem statement

Our species’ sociality comprises a mixture (and sometimes a messing-up) of political and economic considerations, among other issues. Themselves results of more or less fertile political and economic societal circumstances, the technological (r)evolutions strike back in political and economic matters.

If the second imputation is much more common, as dealing with new productive (technological, organizational) methods prompts industry ahead of agriculture in jobs and fortunes creation, the first one is significant too. The very act of governance changed, with the extent of state involvement in economic policy ranging from the more classical-liberal, capitalistically-entrepreneurial takes in the Anglo-Saxon world to the proto-welfare-states springing in the continental Europe. Notably, each wave of Industrial Revolution got state agencies and public policies in even more direct contact with ordinary people. Yet the trend is far from being exhausted.

Research questions

This essay briefly surveys the accumulations in terms of major impacts coming from technological breakthroughs – embodied in the four (and counting?!) waves of Industrial Revolutions – on the broad soci(et)al fabric, with an explicit focus on the political sphere, as well as with the use of economic lenses.

Although it draws upon popular historical retrospectives, and occasionally playing with prospective tools, the exposé is intendedly theoretical. It aims as sketching answers to questions such as: What can be noticed observed at the interplay between technology – politics – economics across epochs?; How much contractual any social contract really is and how technologies may improve this?; Is the representative type of democracy truly superior to the participative one?; Does the society of the Industrial Revolution 4.0 have the means (or the will!) to restore/install social contract’s legitimacy via more participative democracy?

Research methods

Short of entering the debates pertaining to the philosophy of science, the authors are aware of (grosso modo) methodological disparity of social vs. natural sciences and adopted, for this exploratory topic, a rather austere, qualitative, deductive route, than a luxurious, data-based, quantitative and empirical one.

There has been found as an adequate (stricto sensu) methodological toolkit the one containing: a brief (praxeo)logical/deductive investigation of the coherence and consistence of some state-of-the-art arguments within the extant literature; a short scrutiny of both qualitative and quantitative historical records involving processes at the confluence of industrial revolutions with social phenomena, merely related to government issues; a terse attempt to demonstrate that, theoretically and practically, the evolutions in information technology and communications (IT&C) affairs shall contribute to more ethical and efficient social contracting.

Expected conclusions

An in-the-making research route such as this one has as much novelty as enduring common sense. Amid narratives that tend to associate technological arduous progress with the risk of dystopian abyss, this study is not intended to be a manifesto for re-reading and re-writing the more often than not unread and unwritten social contracts, but it may well join one endeavor of such genre.

After centuries (if not millennia) of attempting to demonstrate (bloodily a posteriori than peacefully a priori) that strong dictatorships and despotisms are worse than the most fragile democracy because of the degenerative/corruptive nature of (absolute!) power, it may be the ripe time for giving back the power to the people, though not in a socialist-revolutionary, but in a liberal-evolutionary way. The incoming “4.0 citizenry” has the wherewithal to be more participative (cutting down political middlemen) and genuinely contractual (cutting down political mythologies).

Generations of Revolutions: “the Good” Technologies, “the Bad” Politics and “the Ugly” Economics

Revolutions, irrespective of how large-scale, out-of-the-blue and severely-altering might look, could be regarded as caught in evolutionary sequences – that is they originate in other pre-existing types and their distinguishable differences come from modifications across successive generations. Or they may be seen as revolutionizing one another. By revolution we understand either an overturning of de facto patterns and delving into what lies ahead (this is the “modern” type of revolution) or a return to the original positions (the “traditional” type).

Even if a famed principle states that “natura non facit saltum” (“nature makes no leap”, dictum shared by Charles Darwin, a biologist, and Alfred Marshall, an economist) – human nature being included! –, the free-willed social character of human existence, based on exchanged and changeable ideas, allows for the idea of revolutions, in either evolutionary or revolutionary waves. Be they in technological ingenuities, political ideologies or economic/epistemological inquiries, such revolutions existed in their own right, whilst resonating mutually.

This is neither the moment nor the place for a thorough analysis of the interbreeding of technologies, politics and economics, yet a concise review of some illustrative and illuminating features of revolutionary episodes in the (r)evolutionary series of technological, political and economic changes may be of good use for the purpose of this essay. This might contribute to grasping, at least prima facie, what could not have been possible in an early epoch (practically/physically, or politically, or profitably) in terms of democratic exercise, but it might become in a not so distant future.

The choice of words tagging the three realms (inspired by the 1966 Italian epic spaghetti Western movie – The Good, the Bad, and the Ugly) is not scholarly, but it relies on pop wisdom. Etymologically, technology is a “discourse on the arts, both fine and applied” (Britannica), something inherently good. Politics, dealing with the distribution of power, is the “art of looking for trouble, finding it everywhere, diagnosing it incorrectly, and applying the wrong remedies” (Ernest Benn apud Spring, 1944, 31). And economics is the “dismal science” (Carlyle, 1849), disciplining us to live with the scarcity doom.

Figure 1. Waves of Technological, Political and Economic Revolutions

Source: Own representation
Source: Own representation

Nota bene: The moments or periods associated with the beginnings of each breakthrough are mainly indicative. The tiers overlap and interplay in so many ways, while their consecution does not suggest causality.

Industrial/Technological Revolutions

One common feature of all IRs was a visible change to human condition and social conditions (Stearns, 2021). Even the pre-industrial, agrarian revolution laid the footing for society and, as humanity progressed from a hunting-gathering to a sedentary lifestyle, that gave way to basic urban settlements with centralised administration, bringing with it the visible stratification of human societies into classes.

Then, the steam-powered IR 1.0 (1760s-1830s) saw the intense transformation of manufacturing processes that enabled mass production, rapid urbanisation and the prominence of a middle class of entrepreneurs. This tendency was further distinct in the electrically- (but also managerially-) powered IR 2.0 (1870s-1914), allowing for greater productivity, greater connectivity and greater globality in corporate affairs.

The Digital Revolution, as the IR 3.0 (approx. 1960s-2000s) is usually recognized, transformed the role of information in society and shaped a new class of white collars, good at data mastery and digital machinery. As for the IR 4.0 (2000s-), it revolutionizes the previous wave of digital technology, with the development of artificial intelligence and machine learning, going forward towards nano-bio-technology and quantum computing, yet with assorted fears of transhumanist Frankenstein-type beasts and useless-class pariahs (Schwab, 2016; Johnson and Markey-Towler, 2020).

Mapping the very roots and reverberations of the Industrial Revolutions is not an easy task. One of the verdicts is quite striking: “the Great Enrichment was built on ideas, not capital” – where the “Great Enrichment” (McCloskey, 2016) is the process set in motion by the “Industrial Enlightenment” (Mokyr, 2013).

Thus, if engineering and organizational innovations (i.e., the spinning jenny, the insurance undertaking etc.) plus those within in politics and society (i.e., the US Constitution, the British middle class etc.) are the visible pillars of our modern world, their deep foundations spur ultimately from a change in what Adam Smith (1759) once labelled as the “moral sentiment”. It implied an ideational change in economic/political rhetoric.

In the great ABC of social systems’ flow, the Bourgeois Era (following the Aristocratic one, and interrupted by Communism) was that time in which merchants and entrepreneurs began to enjoy respect and admiration, being able to aspire to (at least in principle) the equally-accessible ranks of elites. They embodied the libertarian-egalitarian values of the new-born, loved and hated, “industrial society”.

Politico-Ideological Revolutions

In a sense, technological disruptions were the by-product of liberating political idea(l)s and ideologies. They reinforced the former or usurped them, as technical progress spills over equally across the friends and foes of voluntarily cooperative society. Alas, political ideologies have a tumultuous course of their own (Weiss, 2019).

The theorizers (and historians) of politico-ideological revolutions are more numerous than those concerned with techno-industrial problems and what unites the cohort is its astonishing heterogeneity, noticeable only by listing some of its “rock-stars”: Thomas Paine, Marie-Jean-Antoine-Nicolas de Caritat, marquis de Condorcet, Immanuel Kant, Georg Wilhelm Friedrich Hegel, Mikhail Bakunin, Karl Marx, Hannah Arendt, Michel Foucault. Belonging to democratic/republican, or authoritarian, or anarchist intellectual traditions, they produce an unsettled, polemic literature.

When we streamline and simplify the approach, we may identify a typological trilogy of archetype revolutions (Patapievici, 2019): a right-wing one (the English Glorious Revolution, 1688), a left-wing one (the French Revolution, 1789) – having in mind the Burkean re-evaluation of the second one (of dissimulated artificial bondage), in the light of the first (of traditional natural bonds) –, and a centre one (1989 Revolution). Specifically, the 1989 moment is about centre/fused values: human rights, rule of law, open society, free trade, democracy, social market economy, inter alia.

Focusing on the intellectual representation of the government in the collective mindset, Micklethwait and Wooldridge (2015) proposed a three-and-a-half-staged revolutionary history of the state. The first came in the 17th century, with the nascence of the Leviathan-state (the allegedly lesser-evil response to the nastiness, brutality and brevity of man’s life in his imperfect “state of nature”, as decried by Hobbes; the offshoot was that nation-states grew up into trading empires, only to mature into entrepreneurial liberal democracies.

The second one was brought by the joint forces of the American and French Revolutions, with the ancient regime’s “old corruption” giving place to meritocratic, accountable, limited, night-watch government. The third one contested the past competitive liberty in favor of a novel compassionate one, as the welfare state (or its degenerate communist mutant) provides for the education and health (or misery?!) of the nation.

And the (uncompleted) fourth piece, labelled by its detractors as a Thatcher-Reagan neoliberal spasm, temporarily delayed the aggrandizement of the state and privatized part of the stifling public monopolies. Fulfilling it implies cutting off individual-rights’ erosion (in the name of biased social grounds) and democratically lighten the state’s burden. Technology and economic spirit/activity seem ready to assist this task.

Economic-Conceptual Revolutions

The most political and politicized of all the social sciences, maybe more than even political science, economics (formerly, political economy) is also subject matter of a myriad of (hi)stories about economic theories. These theories and the histories thereupon are biased by the political fashions of the day, the most pronounced polarity being between market-first vs. government-first camps.

In the bipartisan club of the titans of the history of economic thought feature names such as those of Joseph Alois Schumpeter, John Kenneth Galbraith, Robert Louis Heilbroner, Murray Newton Rothbard or Mark Skousen. Yet sequencing true revolutions in economics is a too hard of a job.

Some indicate celebs such as Adam Smith, David Ricardo, John Stuart Mill, Alfred Marshall and John Maynard Keynes (Dillard, 1978) as perfect candidates for the status of economist-revolutionaries. Others feel the need to introduce in the landscape the Austrian School of Economics – from Carl Menger onwards, as the maintainers of a perpetual counter-revolution to the Keynesian-Neoclassic Samuelsonian synthesis (Dolan, 1976). Or fill Karl Marx in, the iconoclast(ically wrong) depicter of capital and capitalism; or call for Milton Friedman’s Chicago School; or say that the Neo-Institutionalist movement, ignited by Douglass North, revealed the many blind-spots in mainstream theorizing, confirmed by the sudden and synchronic fall of socialist economies.

If still wanting to identify roughly-discernible stages in the (r)evolution of economic thought, there can be possible to find a fair set (and also keep the factor of four from the previous snapshots). The first revolution “started with Adam”, as the Smithian work not only created a scientific system, but also inspired (as it had been inspired by) a mood of ideas auspicious to wealth creation and widespread growth. The second movement responded to the Marxian “dark age” twist in economic science and to the forthcoming communist experiments, with Menger-Walras-Jevons “marginal revolutions” (and a rather marginalized “subjective revolution”).

The third step was done by J.M. Keynes’ sneaking between fading laissez-faire economists and furious socialist economists, professing state interventionism in the monetary and fiscal affairs to stabilize market economies in depression. And a fourth wave was to be the one of a new crop of pro-market economists, gathering Monetarists, Supply-Siders, Neo-Institutionalists and relentless Austrians, who re-forged both logical and empirical rationales in the face of both Western stagflation and Eastern stalemate in the “red” world. These happenings stay proof that the quest for betterment in conducting social/political/economic affairs knows no pause and, despite fluctuations, has embryos for success.

Contractare Humanum Est: On All Said Social Contracts’ Missing Signatures (along with Broken Seals)

Law and Economics scholars and pundits warn that there is no such thing in the real world as a perfect contract. Yet what do they say of “the most imperfect” contract of all – the social contract?

Property and Contract: Emerging Markets and Designing Organizations

Summing up, avant-la-lettre, contracts (springing from property rights) presuppose at least these basic prerequisites:

  • scarcity – relative, means-ends, abundance de-activates economizing behaviour;
  • sociality – no need for “meum et tuum” kind of norms when there is no “other”;
  • inter-subjectivity – deontic or utilitarian reasons inform scarcity-pushed social competitors that cooperation commences with the “good fences make good neighbours” edict.

The most common-sense perspective (yet so twisted and turned across ages) on contracts and contracting is that their understanding stands and falls with that of the concept of property rights: essentially, the contract is a non-aggressive relationship between property owners. (Onto)Logically, property rights cannot be secondary to contracting (be it “social” or formal), for any contract presupposes the prior acknowledgement that the contractors establish their relation (of exchange) based upon resources previously and rightfully owned (bodily or extra).

Such viewpoint, expression of the jus naturalis theory of property – brilliantly strengthened in the Lockean-Rothbardian-Hoppeian lineage –, grounds the attribution of a right of possession exclusively on the existence of an objective and intersubjective link between the human possessor and the possessed non-human object. Thence, it calls aggressive all property claims that can only invoke in their favor “subjective” evidence. This dry verdict cannot be sweetened by objectifications via positive legislation (re)assignment of ownership – for this is “legal plunder.”

Properly set property rights lay the contractual basis for functional markets and hierarchies. Transactions (contract-based acts) are the ultimate units of micro-analysis – with markets comprising independent transacting entities and hierarchies displaying a single administrative entity at the both sides of the deal (Williamson, 1975). Contract theory is en vogue: Nobel Prize for O. Hart and B. Holmström in 2016. Choosing marketed vs. managed transactions and assessing organizational performance, in both for- and non-profit setups, entail contract-sensitive appraisals.

Society, State and Contractualism: Some Canonical and Criticist Visions

The social contract is a defining, yet truly debatable, idea, one of the backbones upon which the social/political/economic body decisively relies. Modern statehood and national economies owe to it the fecundity of the forms they experience(d). Ultimately, the state-creating social contract is one topic where the modern severed from the antic: the latter’s political order rests on contributions to the common good, the modern runs away from violence.

Whether the social contract elevates humans from the savage and menacing state of nature, entrusting them to an absolute sovereign ruler (Hobbes, 1651) or to a government of trustees (Locke, 1689), or provides shelter from the deleterious civil society, which estranges them from an idyllically free state of nature just to enslave them (Rousseau, 1762) is a matter of worldview (Weltanschauung). The state is preached as that political institution transcending the violent ordeal by converting the outlaws’ competition-in-rampage into a monopoly of legitimate violence (Weber, 1965).

Yet, this discernment and enforcement of rights and responsibilities of the governing and the governed is an unstable compound for both Right and Left (Skocpol, 1979). On the one hand, for classical liberals/libertarians, the state, though protective, even providential, hides under its generosity and solidarity rhetoric the embryos of domination over the individual. And on the other, for socialists/Marxists, though emancipated from feudal absolutism, the state is the tool of those in control of the means of production to exploit the have-nots.

Despite ideological clashes, the state-establishing governance and the rule-of-law social contract is vulnerable infrastructurally, in its core legitimacy traits. There can be noted at least three main fragilities in (all!) theories on social contracts (Evers, 1977):

  • people’s “tacit consent” – based on benefits accepted or residency preserved – is overrated;
  • citizens’ “self-enslavement” to sovereigns/majorities/legislators/law-enforcers is unnatural;
  • prerequisite for the rule of “just” law is non-aggression (a duty epically failed by the state).

Issue at Stake: Social (Quasi- / Illusive / Null and Void) Contract

A much simpler critique of the social contract – to which a Constitution looks like a formal proxy (Lermack, 2007) – does not need a thorough cognisance of the savvy (or sophisms) on that matter from Socrates, Thomas Hobbes, John Locke, Jean-Jacques Rousseau, Ayn Rand or John Rawls. It rather needs going backwards to the most widespread view of the very idea of contract, genre to which the social contract is a species:

  • was there a mutual assent among the parties, expressed by a valid offer and acceptance? (though crucially is to first identify the parties, de-homogenizing them from third-parties);
  • were the promises made by the parties exchanged for adequate consideration from the rest? (that is, do they unequivocally understand what they are giving up in exchange for what?);
  • did the parties have the capacity to contract? (presuming this is true, what happens with those lacking capacity yet related to the parties – are they parties, third parties, “objects”?);
  • is the contract legally enforceable? (we have a case of circular reasoning, for the legality expected to govern contractual relations among the parties is hereinafter expected to being established).

Power to/for/by People: On Participative vs. Representative Femocracies’ Operational Conundrums

Remaining silent for now to the above quiz, and before turning towards eventual technology-infused answers, we make a stop at the “0 km” of social contracting: the participative democracy.

Participation and/versus Representation

Neither the political system nor the government make sense in democracies without the participation of citizens as voters. Nor, obviously, the social contract that it is said to establish them. For brevity reasons, we will skip over the succulent discussion on political regimes. This is a core term, which survived antics’ political philosophy translation into modern political science, dealing with the relationship between the exercise of authority and obedience – that is between those who command and those who obey.

Here democracy featured all taxonomies and rankings, but not always in the pole position of people’s rational choice, as it has been summarized in recent times: “[D]emocracy is the worst form of government, except for all the others.” (Churchill, 2008) The essential point is not whether democracy is rightfully portrayed as another “God that failed” (Hoppe, 2001) but, being as it may, how it conciliates participation and representation.

People’s political participation is defined by its deliberate/voluntary and tentatively-influential features. Preda (2013) summarizes the panoply of participatory actions:

  • the classical/conventional participation – running for a political office (candidacy), voting (in an electoral process), militancy (joining a political party, acting within such an organization or involvement in election campaigning) and even the apparently passive concern for political information (by regular and social media);
  • the protesting/contesting/non-classical participation – revolutions (violent overthrown of existing orders animated by primal instincts coupled with herd spirits, by class fights coupled with charismatic leaders etc.) or petitions, boycotts, strikes, street protests, civil disobedience (striving to bring change within, not of a regime).

Political representation and, especially, the institutional design for representation are a nuisance for political theory, even if political practice continues to roll over more or less satisfactory arrangements. “How we organize the representation,” “how it should be conceived in the first place,” “what are its limits,” “which aspects we can still manage,” “how we do/should choose our representatives” – these are issues associated with any form of democracy, be it well-established or self-proclaimed (for even the dictators or the autocrats are concerned with them being sensed as representative).

Modern democracies, relying on representation and representatives, continue to be accused (or they have already been found guilty) for entertaining a quite vicious “illusion of participation.” Equating representation with participation, modern democracy creates the fancy that politics is owned by and owed to “ourselves, the people.”

Some Efficiency- and Excellency-Based Arguments

A consequence of, though distinct from, participatory democracy, representative democracy appears as a limited and an indirect form of democracy. It is limited for popular participation in governance is recurrent (once every some years) and short-lived (concentrated to electoral ballots). It is indirect in that people delegate, in between ballots, their powers (that is rights and resources) to those deciding in their name and on their account.

Representative democracy is deemed “representative” as long as it builds up on as larger, non-discriminative, inclusive and informed participation as possible, and “democratic” as long as it establishes reliable links between the rulers and the ruled, embodied in a (constitutional) electoral mandate. As well, it is seen as a more appropriate form of governance than mere participatory democracy, for economic and ethical justifications:

  • efficiency – it saves time and money at a social scale, by allowing elected officials to devote themselves to legislative or executive tasks, rather than involving every citizen in every ruling; it is a matter of division of labour superior output; it presupposes predictable timeframes in which political acts to be duly processed, instead of leaving public affairs to vulgate’s volatile, private, daily whims, etc.;
  • ethicality – it is considered superior to both census exclusivism and full participativism, for it includes a filter of socially recognized merits while not prohibiting anybody to take part based on inherited/undeserved statutes; it paves the way for professionalization in politics, rather that abandoning it into dilettantes’ hands; it creates “statesmen-heroes vs. villains” educational, nation-building narratives, etc.

Some a Priori (and Empirical) Counterarguments

Such arguments as the above-listed would sound quite seductive unless trained in readings coming from the Public Choice, Neo-Institutional or Austrian-Libertarian scholarship (or even Neo-Marxian, sometimes right, yet for the wrong reasons) pointing to the contrary, both theoretically and historically – with mass-media being a good library of case studies.

For instance, Austrian swipes on “democratic representation”-related issues stand out through Ludwig von Mises’ famous economic-calculation rail on bureaucracy, Jörg Guido Hülsmann’s reworking of moral hazard as biased-property, not information-asymmetry issue, or Matthew McCaffrey and Joseph Salerno’s review of political entrepreneur’s production function; on the economics of politics, from the Austrian stance, see Apăvăloaei (2018).

“Politics without romance,” as James Buchanan (2003) branded Public Choice, it hosts a much substantial and sophisticated audit, with the likes of Kenneth Arrow, Duncan Black, James Buchanan, Gordon Tullock, Anthony Downs, William Niskanen, Mancur Olson, and William Riker (to name solely some of the coryphaei) at the forefront (Shughart, n.y.).

That said, with human nature stubborn since ever, is there a technological cure for (representative) democracy?

Polis Recoded – 4.0 Edition: On Three Scenarios by Weight of Tech-Revolutionized Social Contract

The scant scientific literature on social contract and IR 4.0 evolves around ideas such as: reviewing citizenship in a cyberspace-mediated or dominated world, given its assortment of concerns regarding digital users’ (data suppliers’) social rights and welfare provisos (Tomasello, 2022); the moral, ethical and legal dilemmas at the crossroads between the human and the artificial intelligences (Variath and Variath, 2020); privacy, security and trustworthiness (Denton et al., 2018).

Our present essay catches another angle. It is not only about dealing with the new realities of “social contracting 4.0,” but with the old ones but using novel technical, participatory instruments. In the “hard” scenario, it is about reshaping the boundaries of polities starting from manifest, not tacit consent; in the “moderate” one, the legislative becomes a more administrative, quasi-executive arm of the sovereign popular will; and in the “weak” one, e-referenda emerge as common practices.

This exercise of imagination starts from the plausible reality that future state of affairs in IT&C 4.0 (artificial intelligence, blockchain, quantum computing) makes possible bolstered-up forms of both cyber-connectivity and security. These represent powerful preconditions for accepting all contractual relations expressed in a digital form, whether private or public, as legally binding, including here the act of democratic participation, such as voting in electoral ballots or in referenda.

Henceforth, a predictable consequence would be the enhanced easiness not only in adding to the social nexus of e-contracts, but in reworking the ones in place, up to reconsidering the whole legal order – desirably so that the new order capitalizes upon and not breaches the existing one. Notwithstanding resistance from statue-quo controllers and benefiters, this contractual chain-reaction may rewrite Constitutions and state power structures, beyond surface-scratching current civic consultations.

Hardcore Scenario: State-Rebuilding 4.0

What all scenarios share is the reliable prognostic of the universalization of digital literacy and access to IT&C terminals, as well as the reasonable pretence of legalizing the exercise of citizenship rights, and duties alike, by resorting to cyber-facilities. Thus, by invoking the symmetry of treatment, once people are encouraged to pay their taxes online, they should also be able to vote accordingly. “No e-taxation without e-representation!” – here is a good slogan for “democracy 4.0.”

Every willing individual could become an active “e-citizen,” in the same vein as in classical citizenship. The essential difference will be the far greater scale and scope of democratic participation. And by accepting uniformity of treatment in terms of permitted e-participation (basically, voting – but in all kinds of elections or plebiscites), the spectrum of possibilities for changes (or preservation, depending on the conservative vs. progressive biases) becomes enormous.

Pushing the above reasoning to the logical limit, such technological easements in reaching a critical mass for critical decisions could give birth to unthinkable options in nowadays mindset. For instance, the “fundamental laws” can be amended in crucial aspects such as the indivisibility and inalienability of national territory, with “individual secession” (of a person and his real estate properties) as a constitutional possibility plus as a constant pressure for bettering governance in use.

There can be imagined jurisdictional mosaics, where different citizens from a neighbourhood are “subscribers” to different state-like providers of “public goods” (law and order, education and healthcare), with the problem of fixed infrastructures, such as those for transportation or utilities, being settled by dedicated inter-state clearing-houses. Of course, the option for such fancy arrangements would depend on cost-benefit calculus, but freedom, not coercion, would do the math.

The mere possibility of creating institutional competition and cultural compactness – of course, balanced against diseconomies of scale and strategic vulnerabilities arising from such heterogeneity of political units – will incentivize the (fewer!) political representatives (due to the participatory nature of the move) to perform and deliver according to the expectations of their voters. Such contractarian societies would curb classic (“captive”) democracy’s perverse arithmetic.

Such against-the-tide intellectual experiments have been made in the Austrian-libertarian, anarcho-capitalist rite, with roots in 19th century era of European or United States nation-building – for instance, see the volume edited by David Gordon (1990) dedicated to the highly inflammable topic of secession. What such exercises lacked was the availability of the technological input for reframing the conqueror-state’s “maculate conception” into a participatory, really contractarian one.

Moderate Scenario: Law-Making 4.0

Realising that it would take long for such a hyper-liberalization of political participation to take place – as it is unlikely to be itself too soon conducive to a political class eager to prepare its own dismissal so abruptly -, there could be envisaged a more gradual move though. That would imply a curtailment of the legislative layer to the limited role of a law educator and formalizer with regard to what, in the end, the people, with the help of reachable and secure technology, will decide.

Transforming the Parliament into a more supple institution (along with the rest of the state apparatus), that only prepares the supply of laws or provides the juridical rigour to citizens’ initiatives before returning them to public scrutiny, would have two effects: reducing the frenetic rhythm of contemporary regulatory creation (as popular majorities are much harder to amass than in the vested-interested, elected national assemblies) and even repelling previous dysfunctional norms.

Even if assuming the underlying social contract as unshakable, legislating within its confines will be more legitimate with citizens at a click-distance in subsequent law-making. “Demonstrated” preference (not polls-based “revealed” preference!) would unequivocally indicate that a matter is so important for one to vote for it; or, on the contrary, merely conducive to inaction. Hence, popular majorities (to be procedurally penned) will better signal “the greatest good for the greatest number.”

Weakened Scenario: Vetoing 4.0

Finally, even if the political Cerberuses in office may find unwise to allow citizens to be the sole creators of legislation, a last redoubt will be to gain the possibility to repel a law (as well as to revoke an elected official) by referendum, in the most operative manner, that is technically obtainable within a digital format. Granting to the people even only the “atomic button” of vetoing undesirable decisions and decision-makers will add to a climate of social quasi-contract legitimacy.

This perspective amounts to a democratic-liberal attitude of the citizen toward elected politicians: “what is not prohibited is implicitly permitted.” Yet, as sovereign, the citizen has the principled right to aspire to proactively dictate the rules of the game, more than being a price-taker in relation to policy-makers. And even with this small increment – that is not always deciding what is best for her, but still declining what is worst -, Democracy 4.0 could be seen as a step forward.

Those who might object to the risk of hastiness in popular decision will have to confront the reply that there is more room for hasty decisions under the cupolas of national assemblies than in mobilizing equivalent shares in the large population, with a far cry superior legitimacy. As for the relative efficiency, there are so many valuable economists/financiers who could evaluate the pay-off / the return on investment from a digital infrastructure that would save costs of poor policymaking.

Conclusion

This essay aimed at preparing the terrain for more thorough works on how IR 4.0 could be converted into a democratizing factor for a worldwide society that decries democratic deficits even in the most mature societies (politically and economically). Part of a series of industrial revolutions that made people more and more aware of their political forces and fragilities alike, IR 4.0 has some unique traits, which distinguish it from the rest of the previous episodes: it is highly empowering. This is true to the extent that people would feel the need to claim back such made-available power.

What stands out in front of everything else is that IR 4.0 favours the freedom of expression, the necessary yet not sufficient first layer of exercising political rights through political participation, coupled with the economic freedoms and economic means to make it happen (as compared to other epochs, when having your voice heard in streets or in media was limited physically/materially). The direct democracy 4.0 virtualization paves the way towards a new reality, with greater possibilities than ever to define, debate and redesign, from scratch, the social contract.


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Written by:

Dr. Octavian-Dragomir Jora – Professor at the Bucharest University of Economic Studies, the Faculty of International Business and Economics, founder and editor of The Market for Ideas magazine and editor-in-chief of the Œconomica journal.

Dr. Mihaela Iacob – Associate Professor at the Bucharest University of Economic Studies, the Faculty of Finance and Banking.


The article was originally published in The Visio Journal No. 7.


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