Decentralized Institutions: How Libertarians and Populists Can Come Together on Tech

When Silicon Valley luminaries came out in support of Donald Trump many noted the novelty of right-of-center politics being openly flaunted on the Left Coast. President Trump selecting former venture capitalist J.D. Vance as his running mate further raised the prospect of the vibe shift heralding a more substantial “Tech Right” consolidation.

Not only did these developments complicate the Valley’s identity as a blue bastion, but they also highlighted the friction between Trump’s brand of populism and the tech industry’s historic affinity for globalization and free markets. Responding to these tensions, Ross Douthat posed the question of “how the tech right’s libertarian impulses can mesh with Trumpian populism and Vance’s desire to be a tribune of the common man.”

Allow me to offer one possible answer. Libertarians and populists can unite in support of new decentralized institutions that use technology to help Americans improve their lives without federal bureaucracies and the organizations they’ve captured.

At its best, this union could marry the workingman’s contempt for a self-dealing and self-righteous establishment with the capitalist’s fondness for investing in alternatives—answering a Jacksonian diagnosis with a Tocquevillian prescription. Specifically, these alternatives can make wise use of technologies for devolving power away from the center—such as the federal government, traditional media, and legacy intermediaries—and toward the “network edge” of individuals and small groups.  

The intellectual origins of this potential fusion are visible in a pair of writings from early 2020: political scholar Yuval Levin’s book A Time to Build and venture capitalist Marc Andreessen’s essay “It’s Time to Build.” While neither man is exactly a populist with a pitchfork, both offer stinging critiques of the contemporary establishment. Levin laments that our elites “have failed those who count on them and let our society down.” Andreessen decries a “monumental failure of institutional effectiveness” rooted in “smug complacency.”

Yet, both Levin and Andreessen conclude the way out is not to dismantle but to, well, build. For Levin, the “populists have good reasons to be angry, but what they offer is insufficient.” A better answer, he argues, lies in revitalizing institutions that shape our relationships, give us purpose, and cultivate the character traits necessary for a free society, such as integrity, loyalty, responsibility, and humility. For Andreessen, building means not just enabling but also inspiring our civilization to produce in abundance the amenities of modern life—housing, education, and energy—as well as those of the future we had expected (fabricators, supersonic planes, and “yes, the flying cars”).

The technological foundations atop which libertarians and populists might build together include a pair of innovations that Douthat himself considers a sign of the Tech-Right partnership’s deeper philosophical compatibility: crypto and AI. For Douthat, one reason the Tech-Right union may be more than just a marriage of convenience is that important segments of each camp share a belief in an “underlying order” to the universe waiting to be discovered or revealed. Douthat writes it is thus “telling that the Silicon Valley types pulled rightward” often are “enthusiasts for edge products like crypto and A.I.—the would-be secret finders, the mystics of capitalism.”

This compatibility also manifests at the more mundane level of political philosophy, as crypto and AI’s potential to diffuse concentrated power suits a movement containing both libertarians and populists. Crypto, for example, was designed to obviate a “trusted central authority,” like a bank, in payments. Its resultant “censorship resistance,” provides protection against attempts to un-bank the politically incorrect, like truckers protesting lockdowns. It’s hard to imagine a technology that better unites Jefferson’s skepticism of banks with Hamilton’s affinity for finance.

The role of AI is a bit more complicated, but nonetheless can fit. Whereas crypto is an inherently decentralizing technology, AI has the potential to be one, provided we get the policy right. We must be ever vigilant against the abuse of AI as a tool for control a la the Chinese Communist Party (and to a much lesser degree the European Union). But AI has the potential to radically empower individual users, giving them unprecedented access to the cognitive resources and expertise historically reserved to well-capitalized institutions. Protecting open-source AI, which helps avert incumbent capture by allowing users to copy models, modify them, and run them on their own hardware, will be an important policy lever for realizing AI’s democratic potential.

While both libertarians and populists share a disdain for smug authority, the populists of this moment also aspire to wield state power in a variety of arenas. This creates distance with libertarians, who bolt from the train when today’s populists propose tariffs, industrial policy, and immigration restrictions.

There are real, substantive incompatibilities between libertarians and populists on these issues. Without discounting those, the general skepticism with which both camps regard each other can at times result from a mutual tendency to ignore additional common ground beyond just shared distaste for self-satisfied technocrats.

We see that common ground in libertarian and populist aversion to the inevitable consequences of technocratic meddling: the havoc wrought on the voluntary institutions that define and preserve a free society. Libertarian revulsion at the state running roughshod over private associational life overlaps in important ways with populist grief over the loss of pillars of local communities. It speaks to a shared belief in the value of mediating institutions.

My purpose here is not to wade into libertarian and populist disagreements over the role of economic creative destruction in weakening certain civil society institutions in some communities. Nor is it to sweep under the rug irreconcilable disagreements between libertarians and populists regarding many policy responses to economic dislocation. (I refer anyone interested to my colleagues’ work on these issues for why the libertarians have, in my humble opinion, the better arguments.) Rather, my purpose is to highlight just a bit more common ground than is sometimes acknowledged in order to identify a policy response to the problem of elite failure that both libertarians and populists can agree on.

That policy response, I argue, is to embrace decentralized institutions.

At first glance, the term “decentralized institutions” may seem self-contradictory for a couple of reasons. For one, technologies that disrupt centralized authority have themselves contributed to the crisis of trust in institutions. For example, alternative media sources challenging traditional authorities’ monopoly on storytelling (particularly about their own “trustworthiness”) eviscerated public confidence in those legacy institutions. Second, a core purpose of institutions is to restrain individual behavior through social obligations and relationships. At first blush, crypto and AI may appear to undermine social constraints and relationships, as the tools act as technological substitutes for some traditionally social functions.

But a closer look at these technologies reveals their deeper potential to coordinate people and modulate conduct. Rather than being merely disruptive to centralized authority, they also provide the means of constructing sophisticated alternatives featuring community life replete with formal and informal norms.

For one, crypto and AI are more social than meets the eye. Early adopters, for example, are obsessed with talking to each other over public forums and private group chats. These channels involve many traditional community functions. For instance, private efforts at whitelisting legitimate projects and flagging possible frauds and scams give social reputation a much greater role in these circles than many outsiders may assume. In addition, simple tools like upvotes, download counters, and discussion threads can leverage the wisdom of the crowd to identify useful projects and troubleshoot shared issues.

If the contention is that online relationships can never count as sufficiently social, then we’re going to leave a lot of potential community and institution building on the table. It’s far better to creatively adapt to our highly digitized reality by using and improving the tools we have than to simply wish things were otherwise.

While many often question crypto’s utility and criticize its seemingly impersonal quality, ultimately it is a technology for improving digital relationships through new governance tools. It was designed to address a specific type of fraud (double spending) in payments and has grown into a medium for experimenting with additional social incentives and rules. These include stakeholder voting on how networks operate, as well as built-in checks and balances, such as safeguards against tyranny of the majority. More concretely, crypto has been leveraged to create alternative social networks that give users control over their connections and feeds. For example, on decentralized social networks, users can switch applications without losing their relationships. Crypto’s potency for social organization is even giving rise to new schools of political theory. While it remains to be seen whether the loftiest visions of “Network States” and plural, collaborative democracy come to pass, the broader crypto ecosystem thinks deeply about institution building.

AI can help with decentralized institution building as well, not only as a tool for augmenting individuals’ abilities but also as a means of developing them. For example, while AI tools in the financial arena can “serve as robo-advisors for the masses,” they also can serve as economics tutors, helping users gain capacities. We should expect to see similar phenomena in other disciplines. Notably, Andreessen’s “It’s Time to Build” essay pointed to individualized tutoring (shown to improve outcomes) as low-hanging fruit for digital technology, in that case internet marketplaces, improving upon the K-12 status quo. AI is also answering that call. Importantly, AI-enhanced education need not be a solitary activity, as providers of AI tutors also spin up community forums. These projects should deliberately focus on community building, as self-reliant individuals and strong communities are mutually reinforcing.

It’s long past time for our leadership class to end its obsession with stamping out technologies that challenge top-down and center-out authority. Regardless of whether those authorities come to their senses, decentralizing tools can empower Americans to work together without the establishment’s permission. Libertarians and populists should themselves work together to protect Americans’ rights to access these tools. After all, competent individuals with the ability to spontaneously organize have long been understood as necessary preconditions for a self-governing republic. But in addition to opposing government infringement on the tools that support these capacities, libertarians and populists should also work together to build private decentralized institutions as pillars of our free society well into the future.