Is the era of technological fragility and technological freedom over? Depending on how you look at it, tech boys Sam Bankman-Fried and Elon Musk have either succeeded or failed not only in their companies but across industries. As these branches became the currency and the new town square, the hype that private technology could replace traditional government functions suddenly died down.
After the bankruptcy of FTX and the collapse of the Twitter verification system, where do you want to get the currency and reliable public information from? A shady cryptocurrency where even the most legitimate ones fail when competitors instigate old-school “bank runs”. A social media platform where even a new "town square" can turn into complete chaos when the new owner wants to make some easy money.
Investors are likely to return to the US dollar and Treasuries, which have begun to recover amid signs of weaker inflation, as they look to the old guard of the Justice Department, the Securities and Exchange Commission (SEC) and other government agencies. . go and clean things up.
I'm not crazy. I started assembling Radio Shack radios in the 70s, learned the basics of programming in the 80s and have since embraced everything big except social media. Economics never made sense to me until those hapless big boys showed that "you are the product", then who cares? We read a premature obituary for tech. In fact, of course, we are not going to go back to earlier stages of technology.
But techno-libertarianism—the ecstatic feeling that old-school sovereign nations run like dinosaurs, that technological fragility, rampant free markets, and total liberalism will give us a utopia of freedom, choice, and self-determination—it might just be the pinnacle. The problem has always been that profits are more important than reliability, and revenue and "performance" are more important than infrastructure and stability. Business is business and no one should blame them for that. Profit is the goal of shareholders, and modern trading companies are designed to maximize it, while ignoring alternative ESG metrics. However, business does not operate in a vacuum. This is made possible by a well-balanced playing field built on a neutral infrastructure that all players so trust.
Currency is an important part of business infrastructure. The SEC has refused to regulate cryptocurrencies for too long, and now the chickens are back home. Billions of dollars are at stake. If FTX is the “Lehman moment” for crypto, it may be too late for the SEC to take any meaningful action and it is time for Congress to step in. techno-liberal ideology, which is a living decentralized technology, can escape these "old world" entities.
Can governments tame cryptocurrencies? This may require international cooperation through agreements. But in a world of rising geopolitical tensions and a struggle for technological dominance, can big enough world powers come together to succeed?
A reliable source of information is just as important for a business. Attacks on "mainstream media" have strengthened the position of alternative news sources such as Twitter. Of course, the mainstream media is also largely filled with commercial corporations. But with the beginning of state regulation of radio and television, new news sources became accountable to the government, and not just to investors. Can the government finally tame social media? We have to find out, because it doesn't make sense that it's a carnival night in a new square where we don't know who's real and who's not, even among the workers of the factories we rely on for critical medicine or politics. . in charge of the state. Again, this will likely require not only congressional action, but international cooperation and agreements to restore regulation and restore secure infrastructure.
Maybe the days of the technical novel are numbered, not the days of the old sovereign state. Some things stay (warts and all) because they've proven their value in the long run. Bright, shiny novelties sometimes get bored in the hot sun and are knocked down for the next thing. I share libertarianism and do not like unregulated regulation. However, the basic infrastructure required for a secure regime of ownership, contracts, trade and investment cannot be provided safely and securely by the unregulated private sector.
Traditional governments could be big winners after the collapse of FTX and Twitter; we need it to double the supply of currency, information, and critical regulatory infrastructure so that businesses and economies can thrive.
Sean M. O'Connor is Professor of Law and Executive Director of the Center for Intellectual Property and Innovation Policy at the Law School. Antonina Scalia of George Mason University. He is a visiting professor at the Boston College School of Law and teaches contracts, corporations, and securities regulation.