Any polity with multiple governance mechanisms is more likely than not to be a mixed polity. While classical governance debate often revolves around the respective merits of oligarchy, monarchy, and democracy (see also the famous “constitutional debate” that Herodotus puts in the mouth of the Persian aristocrats following the death of Cambyses, Histories 3: 80-82), in reality most real-world polities are at least somewhat mixed. The American constitutional system, for instance, clearly incorporates elements of all three systems, and nowadays also includes a vast swathe of bureaucracy as its own governance mechanism ruling via an ever-expanding nexus of administrative law.
Modern polities generally trend towards becoming more bureaucratic over time, as the size of the state expands with growing population and the scope of state activities expand with growing wealth. They generally also trend towards more open franchises and greater minority protections against crude majoritarianism, becoming in a sense more democratic. Some of this may also be the consequence of growing societal wealth, which gives more groups a voice and so creates the demand within political structures for that voice to be expressed. It is easier to buy off the representatives of a new elite by incorporating them into existing political structures than to have to suppress a potential revolt.
Earlier, less democratic & bureaucratic forms of mixed polity may be especially important for us to study. This is partly because DeFi is itself at a very early stage in its development, and so has relatively few stakeholders. Secondly, a unique feature of governance of cryptocurrencies is the ease of forking, which in practical terms means that exit is very low-cost and voice is consequently less important to express. Sailing away on the Mayflower has never been easier. Irreconcilable disputes need not be dealt with via civil war or painful compromises. Accordingly, many of the historic pressures towards greater democratic representation are removed, which perhaps enables the perpetuation of a mixed polity more akin to the Roman Republic than the modern liberal democratic state (should this be thought desirable).
The English Parliament of 1760 represents one of the most well-studied examples of a mixed polity, incorporating elements of monarchy, oligarchy, and (limited) democracy. Voluminous contemporary documentation allows us to study the operations of this polity, one that had evolved from Anglo-Saxon witans and the Norman parliaments of feudal Middle Ages through the trials of the Civil War. It bears remarkably little resemblance to the modern British constitution, which is largely the creation of 19th-century rationalist planners who authored the various Reform Acts (most notably that of 1832).
In 1760, however, the Sovereign remained at this point a key independent political actor, with much recent historical work undoing the earlier tradition of Whig historiography that sought to downplay the importance of the Hanoverian Kings in favor of their Ministers. George II and in particular George III emerged as key actors in domestic affairs as well as foreign (where even George I had always exercised much influence). In the reign of George III, governments that did not enjoy his personal support struggled to last much longer than a year or two. While in the reign of George I, it made more sense to think of factional politics with a Jacobite-sympathizing Tory minority pitted against the dominant Whig majority, as time went on this factionalized “party politics” disappeared in favor of far more fluid and temporary coalitions that allowed the Monarch to exercise considerable independent political influence via his considerable powers of patronage.
Monarchical patronage came in a few different forms. Most notorious was the “secret money”, often paid as pensions to certain MPs (or their relations) in need of extra funds, that came directly out of the King’s private revenues. This practice continued all the way through to 1782, when it was curtailed by Act of Parliament, but even at its height the direct leverage the Crown exerted over the House of Commons was never high. Influence was generally procured in more indirect ways. Appointments to eminent public posts were the gift of the Crown, and these were a valuable currency for the Sovereign to employ. Though some public posts could not be subordinated to parliamentary interests without affecting the core interests of the realm – George III generally refused to give Army commands to unqualified men – many were less critical. Many sinecures in the apparatus of state could easily be given to MPs, as could meaningful positions of power in the civil service, since the independent bureaucracy had yet to come into being, and the Under-Secretaries of the Treasury and Foreign Office were typically MPs. Government contracts for the equipping of the Army and Navy were another valuable currency. Then, as now, seats in the House of Lords (far more powerful than the institution which currently bears that name) via the gift of peerage were also highly sought after, with Irish peerages and baronetcies as consolation prizes.
Meanwhile, the traditional English aristocracy still enjoyed enormous political influence. Even in those boroughs & counties where population was numerous and the franchise was relatively broad, even on occasion stretching to several thousand male freeholders, open voting made it virtually impossible for tenants to vote against the interests of the great landowners. Most seats were practically hereditary, and the Parliament of 1760 enjoyed a substantial bloc of country gentlemen who, having inherited their seats, were relatively politically independent (although with conservative political inclinations) due to the local nature of their power base. Paradoxically, these men were often elected in the more populous and open-franchise boroughs. County constituencies typically returned multiple members to Parliament, and it was customary in many seats for power to be divided between the sons of the great landowners and the minor gentry. These minor gentry represented much of the largely apolitical, independent base of the Parliament of 1760: the scions of the great aristocratic families, by contrast, were much more likely to take a far more active role in parliamentary proceedings. These great families often had multiple family members in the Commons at once:
Pocket or “rotten” boroughs - tiny constituencies with perhaps a few dozen electors (if that) - were traditionally the most-mocked aspect of the unreformed English Parliament (such as these lampoons in popular TV series Blackadder). Yet the pocket boroughs (so-called because they were invariably “in the pocket” of one man) represented perhaps the most meritocratic aspect of the system, since they allowed for the “new men”, the merchants with interests in the East India company or the Caribbean, to buy seats. If one had accumulated great wealth but lacked local powers of patronage the traditional aristocracy enjoyed, but still longed for political influence, then a pocket borough was the obvious solution. The merchant class did have a few other avenues to representation: merchants were often returned at the great port cities, such as Bristol and London (Southwark in particular) but these locations were wildly under-represented in Parliament relative to their actual population, and so comparatively few seats were available. The pocket boroughs filled the gap.
The pocket boroughs are of particular interest since they represent one of the most curious features of organic polities: how apparent dead elements of the system can be repurposed into new, living forms. Their existence was due to historical accident, the legacy of ancient privileges vested in towns of former economic importance, such as the historic “Cinque Ports”. By the 18th century these ports had largely silted up or been otherwise replaced by the new ports of Southampton, Bristol, and Liverpool, but their political privileges had survived and they supplied a large number of pocket boroughs to Parliament. They were particularly useful to the merchants who had made their fortune abroad and so possessed few political connections at home. Even in the port cities, the merchants and bankers returned to Parliament were generally men of political stature both locally and on a wider scale, who could be trusted to be effective advocates for the city’s interests with the Treasury and Board of Trade.
In summary, the structure of politics at the accession of George III displayed the following features:
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Remarkably dispersed power, by contrast with modern polities. Prime Ministers today often enjoy large majorities and benefit from a long history of whipping, which keeps intra-party discipline high. They also rule through broadly ideologically aligned parties. The Hanoverian Kings and their Prime Ministers, by contrast, had no whipping operation and no organized political parties. They had to secure votes through personal connections and economic incentives offered to individual MPs and the interests in the constituencies they represented.
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Broad powers of patronage - the Government enjoyed considerable discretion as to how best to spend its revenues, and could also offer numerous career advancement opportunities to the ambitious.
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A high degree of embedded institutional conservatism through the presence of the fairly apolitical “country gentleman” voting bloc, the persistence of the great families, and the status-quo-preserving incentives of the Sovereign.
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A limited but meaningful franchise - though popular representation as we now understand it did not exist, contestants for seats still had to be acceptable to often quite a wide variety of local actors who were not themselves MPs. Even in seats with strong Government interests or a dominant great family, it was normally common for at least one more local MP to be returned. The views of the general public were also relevant in some seats, expressed through a variety of means. The Tiverton Riots of 1765 saw great disorder on the refusal of the Mayor and Corporation to elect a certain wealthy out-of-town merchant to the seat, the town being dependent on the wool trade and the locals fearing the loss of employment after the death of the town’s previous great employer.
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Pro-growth incentives - since the voter base was largely a) large landowners and b) the Municipal Corporations, each had an obvious incentive to maximize local revenues, either through attracting government money (e.g shipbuilding) or through economic growth more broadly, much of which could be captured by these same voters. And since the MP class was almost exactly the same as the voter base, the MPs themselves had strong vested interests in maximizing national and local revenue.
In the crypto/DeFi space, some aspects of this polity are naturally replicated, such as the limited franchise. While in theory the DeFi voting base is very broad, in reality very low participation rates means that whales find it easy to swing votes and projects have to get to a very mature stage before this is no longer the case (do any existing projects even qualify?) In effect, we already have a limited franchise to work with, and even if we actually wanted mass voter participation we’d probably struggle to get it (though it seems unlikely that we do). It’s worth noting that while in theory the share ownership base of major corporations is different, in reality that nature of institutional ownership (pension funds, asset managers like Vanguard and BlackRock) can and does concentrate voting power into a small number of hands, so that even huge multinationals like ExxonMobil are surprisingly “hackable” by activist campaigns (e.g Engine No. 1).
Other similarities to the unreformed English Parliaments are forced on us by external constraints: power needs to be dispersed (at least to some degree) due to the SEC’s regulations. There are, however, some reasons why at least some dispersed power might be desirable even in a world where the SEC regulatory issue didn’t exist.
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Partially decentralized governance may well be more resilient in the face of hostile government pressure - I can easily imagine a world where the core governance functions of Reserve need to be operated by a geographically dispersed group of a few dozen people, with some built-in redundancy and with core personnel each living in countries that lack mutual extradition treaties.
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The Reserve ecosystem encompasses a wide variety of actors who need their interests protected, especially the merchants and the retail users of the Reserve currency, BUT crucially these actors are unlikely to want to play a very direct role in governance themselves - they need representation, and are unlikely to get that representation directly through a plebiscite.
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Dispersed power offers a partial solution to the problems of pluto-democracy: if power is held at multiple nodes of authority, it makes it harder for one whale to buy up all the available voting power. This is mostly only true, however, if power is held at some of these nodes by non-democratic right (i.e it is inherited and/or hard to transfer beyond a fairly narrow circle). This was the case in the age of hereditary seats in Parliament, where it was considered “the done thing” to keep the seat in the family in order to advance the prospects of your heirs, rather than just sell it off to the highest bidder (N:B a house that went extinct in the male line would still often retain the seat for the husband/children of the surviving females).
The pluto-democracy problem that DeFi confronts is particularly acute, since it seems unlikely to ever go away. In the medium-term, the limited supply of RSR will continue to enable outsider whales to buy large voting stakes, but in a world where Reserve sees widespread adoption, institutional ownership could well see Reserve confront the same problems that ExxonMobil has faced in recent times (I assume here that institutions buy RSR in addition to RSV itself, but this seems very plausible, given that you assume institutions would actively want governance rights in the thing they’re buying). In short, even if Reserve becomes globally popular, one-coin one-vote is still going to be a deeply undesirable governance structure and the “crypto whale, pluto-democracy” problem is not going away, but with pension funds & asset managers playing the role of today’s Justin Suns.