Under the aegis of a feverish entrepreneurial spiritualism and redoubled post-crisis capitalism of the fourth industrial age, the radical transparency and openness once promised by blockchain is in retreat. We are witnessing blockchain-as-enclosure; enclosure through the proliferation of private permissioned ledgers, which are indicative of capitalism’s generalized tendency towards the imposition of property definitions on common (cyber)-space, and the promotion of non- or anti-relationality via forms of withdrawal, exclusivity and privatization.
In the first part of this two part essay, I argued that the oft-quoted notion of blockchain as “disruptive” was a fallacy. In particular, when disruption confers upon blockchain a revolutionary character that attempts, falsely, to sustain the idea of it as a radical alternative to long-standing and well-rehearsed modes of financialization. Moreover, it is the same global financial corporations who caused the 2007/08 global financial crisis, and who thus helped accelerate the birth of cryptocurrencies and blockchain as an attempt to negate centralized financial control, who have now taken firm control of the blockchain-as-disruption narrative.1This is summed-up well in a recent article on the blockchain-focused news site Coindesk, in which lead strategist of Ernst & Young’s blockchain and distributed infrastructure, Angus Champion de Crespigny, maintained that, ‘he is interested in how a consortium may help harness the disruptive power of the technology’. The article continues: ‘Originally viewed as a possible threat to parts of the financial sector, the technology (blockchain) is now being embraced by Champion de Crespigny’s firm and others for its potential to streamline many repetitive tasks and generate entirely new forms of revenue’. (Castillo, M. del 2016. “’Big Four’ Accounting Firms Meet to Consider Blockchain Consortium”. Coindesk, August 11 (Online) Available at: http://www.coindesk.com/big-four-accounting-firms-meet-to-weigh-benefits-of-blockchain-consortium/ (accessed 12 October 2016) And, it is those same corporations who now lead the charge on blockchain enclosure.
The Enclosure Thesis
If we take seriously the importance of the dichotomy between the public (open, unpermissioned) and private (permissioned) blockchains that lies at the heart of the enclosure thesis, then it is a shift in cyberspace at the ideological level via an intentional withdrawal into exclusivity, and the erosion and impoverishment of technological potential, which is at stake in the future development of blockchain.
We have, of course, seen this recently with the internet and World Wide Web, the inventor of which, Tim Berners Lee, has been vocal in his opposition to, among other things, the issue of net neutrality.2See, for example: http://webfoundation.org/2015/10/net-neutrality-in-europe-a-statement-from-sir-tim-berners-lee/ (accessed 20 September 2016) But as various Fintech consortia, including global accounting firms and large technology corporations like Microsoft and IBM, consolidate their grip on both the prevailing narratives and modes of implementation of blockchain architectures, the loss or collapse of the blockchain’s potential as a counter or foil to the hegemony of global financial capital (call it blockchain egalitarianism) seems likely. And the echoes of the fate of the internet and World Wide Web only seem to get louder as the hyperbole surrounding blockchain continues to grow.
Tim Berners-Lee’s concerns over the future of his invention remain strident, and the parallels with blockchain are noteworthy. As the following report from The Guardian demonstrates:
[I]n spreading from the grassroots up, his invention has arguably lost many of the egalitarian principles Berners-Lee hoped for. It has become less straightforwardly a force for good. Earlier this month, Charles Leadbeater, former policy adviser to the Labour government and a champion of the web’s potential to give power to hitherto deprived groups, published a report called A Better Web for the Nominet Trust pointing to the pervasive misogyny of the web as an example of how the democratising potential of the internet has not been fulfilled.3Jeffries, S. 2014. “How the web lost its way – and its founding principles”. The Guardian, 24 August. (Online) Available at: https://www.theguardian.com/technology/2014/aug/24/internet-lost-its-way-tim-berners-lee-world-wide-web (accessed 30 September 2016)
Enclosure was the sine qua non of early stages of capitalism and the first tentative steps of what Marx calls primitive accumulation and David Harvey has latterly called accumulation by dispossession. To be clear, however, a direct comparison between 18th century land enclosure and blockchain would be nonsense, or, at the very least, exceedingly hard to justify in the round. Accordingly such a comparison is not the intention here. Rather, enclosure is evoked primarily because it is indicative of capitalism’s desire to impose private-property definitions on common (cyber)-space, which leads, amongst other things, to the promotion of non- or anti-relationality via withdrawal, exclusivity and privatization. Something, it should be noted, that in this instance only has a marginal impact upon the nature of the technology itself. In other words, blockchain appears much the same whether in a private or public form. Fintech consortia are busy ploughing a furrow in which to lay the seed for future development of exclusive and privatized blockchains capable of generating new and recycled revenue streams on behalf of large private commercial interests. In other words, the Fintech ideology is monolithic in its concern to impose, indelibly, on the blockchain phenomenon the mark of capitalist property definitions.
“'[E]nclosures’ under the private and general Enclosure Acts”, Eric Hobsbawm reminds us, “broke up some six million acres of common fields and common lands from 1760 onwards, transformed them into private holdings, and numerous less formal arrangements supplemented them”.4Hobsbawm, E. 2002. The Age of Revolution 1789-1848. London: Abacus, p.188 “[T]he social violence of enclosure consisted”, argues E.P. Thompson, “precisely in the drastic, total imposition … of capitalist property definitions”.5Thompson, E.P. 2013. The Making of the English Working Class. London: Penguin Modern Classics, p.238 Enclosure occurs therefore, not as a single event, but as a violent series of “less formal arrangements”. In other words, there is more occurring outside of plain view of blockchain enclosure (in spite of the rhetoric!), and it effects are potentially far greater.
And, indeed, this would appear to be the case. As a corollary to enclosure there are also calls to deregulate the financial and market landscape in which blockchain is already operating or being primed to operate in the near future.6See: Innovate Finance 2016. Blockchain, DLT and the Capital Markets Journey: Navigating the Regulatory and Legal Landscape. (Online) Available at: https://issuu.com/innovatefinance/docs/blockchain-capital-markets-journey- (accessed 12 October 2016) As a product of enclosure, this threat of further deeper deregulation of financial markets is arguably potentially more dangerous in the long term. Enclosed permissioned blockchains therefore are not only being re-orientated and re-mobilized towards a contentious ideological (privatized) sphere, but in doing so a backdoor to further deregulation of markets is being opened. Using blockchain to inaugurate further market deregulation, we might argue, returns us to the fallacy (the smoke and mirrors) of blockchain as disruptive. But it also suggests that blockchain is a proxy for the realisation and actualization of new markets and the deeper entrenchment of financialization at a global level, through a scarification of the existing regulatory and legal landscape.
Traditionally law plays a key role in shaping long-term behaviours across both public and private social domains. But in this instance (in the UK at least) law or rather regulation has by and large left the evolution of blockchain well alone. This is due to a number of factors, including governmental promotion and celebration of innovation and the feverish entrepreneurial spiritualism that has been unleashed by the neoliberal age. This does not mean there is a legal vacuum where blockchain is concerned. Far from it. The global financial arenas in which blockchain is now beginning to be deployed already have significant levels of regulation able to capture any potential problems in the deployment and use of blockchain and associated technologies, such as smart contracts, without having to resort to direct legislation and regulation. This is, however, precisely the legal and regulatory landscape that some would like blockchain to “disrupt” to their advantage. Law must therefore remain critical where blockchain is concerned, and avoid being seduced by the sand-box fantasies of capitalism.
Blockchain Provenance as Counter-Enclosure?
Provenance is a domain in which blockchain can be, and to some extent already is, primed to serve a purpose that is not exclusively for the benefit or advantage of global financial capital. Although it must be pointed out that this domain is already compromised. In other words, a perverse entrepreneurialism has already begun to capitalize on blockchain provenance. The question, therefore, is whether or not any viable possibility of an open and egalitarian blockchain, counter or post-enclosure, remains?
Provenance, as a general concept, is presently the strongest exemplar of a blockchain use case that is not exclusively geared towards benefiting capitalist modes of production and satisfying the imposition of capitalist property definitions. Provenance is able to hold the exploits of capital to account by creating, among other things, immutable records of commercial supply chains. In the name of “social enterprise” and corporate social responsibility (CSR), however, this concept of provenance has already been compromised through a bridging of commerciality with egalitarian principles. In this spurious concept of free-market fairness we find both a conflicted and watered-down mode of social good. In their white paper, Provenance.org, who fall into the category of social enterprise, claim that:
There is a growing rallying call by customers and governments demanding more transparency from brands, manufacturers, and producers throughout the supply chain. In the UK, 30% of consumers are concerned about issues regarding the origin of products but struggle to act on this through their purchasing decisions. The market for products of proven origin is growing. In the future, regulations like the European directive on non-financial reporting or the UK Modern Slavery Act will require companies to transparently disclose reliable information about their business footprint7https://www.provenance.org/whitepaper (accessed 29 September 2016).
Provenance.org, I argue, precisely advocate for the type of neoliberal values, not least on the front page of their website, which are highly problematic and serve to undermine provenance as a tool to counter the hegemony of global financial capital. Does this perfectly demonstrate how something as vital as provenance can be soured – especially when it comes with a price plan? The concern here is obvious: why leave determinations of the quality of commercial transparency to the very actors who ought ultimately to be being scrutinized? No matter if those interests are related to global multinationals or local entrepreneurial start-ups, the mantra of incessant growth recited by any commercial interest who take seriously their commitments and responsibilities to the cause of capitalism will, indeed must, ultimately see past any and all modes of regulation and critique that threatens their survival. That is the nature of capital.
As a tool for transparency and provenance blockchain could provide a secure way in which to monitor and check the exploits of global financial capital without having to be subsumed, neck-deep, in it. But, as suggested previously, the pendulum swings both ways. Blockchain transparency and provenance can clearly also strengthen capitalism by painting upon it a trusted and friendly face. Trust thus becomes nothing more than a commercial prosthesis, a marketing strategy for leveraging new markets. Rather than a foundational, first principle of social relations.
In precisely these terms are seeing blockchain provenance drawn into the fashion for “circular economy”. A strategy that allows business to appear to take seriously the need to manage supply chains for the social good through, for example, mitigation of physical waste, as well as waste in terms of time and energy. But while the concept of circular economy appears socially and, perhaps more importantly, ecologically focused, we must not disregard the fact that commercial interests, by and large, begin and end with the company balance sheet. This truism of capitalism underscores the focus on blockchain, largely because blockchain can help lend legitimacy to business practice and thus the exploits of capital. The appearance of blockchain’s “disruptive-ness” provides a tabula rasa, and chance for capital to claim a new saintliness.
Blockchain provenance can be a radical answer to enclosure if it remains in an open and public blockchain able to bring together hard monitoring, recording and reporting of the exploits of capital. At present provenance appears to be heading towards the nonsense of onanistic forms of commercial self-regulation. This will not provide an egalitarian outcome. Capital is not self-correcting; it is self-perpetuating. Thus critical examinations of blockchain are needed to reclaim the initial promise of transparency and those latterly of provenance. Blockchain, under such conditions, could provide a highly reliable witness to the exploits of capital, with a view to maintaining a critical, honest and true disruption of capitalism. Contrary to the prevailing mainstream narratives that would be blockchain as disruptive, and that is why enclosure must be resisted.
Part I here.
Robert Herian is Lecturer in Law at the OPen University