From the Regulatory State to Voluntary Certification Networks

I believe that the growing fiscal crisis of the state, and the growing tendency toward high unemployment and underemployment becoming a norm, will have two long-term results:  first, the production of a growing share of value in the informal economy in place of its purchase with wages; and second, the decoupling of the social safety net from both the welfare state and wage employment.

Getting from here to there will involve a fundamental paradigm shift in how most people think, and the overcoming of centuries worth of ingrained habits of thought.  This involves a paradigm shift from what James Scott, in Seeing Like a State, calls social organizations that are primarily “legible” to the state, to social organizations that are primary legible or transparent to the people of local communities organized horizontally and opaque to the state.

The latter kind of architecture, as described by Kropotkin, was what prevailed in the networked free towns and villages of late medieval Europe.  The primary pattern of social organization was horizontal (guilds, etc.), with quality certification and reputational functions aimed mainly at making individuals’ reliability transparent to one another.  To the state, such local formations were opaque.

With the rise of the absolute state, the primary focus became making society transparent from above, and horizontal transparency was at best tolerated.  Things like the systematic mapping of urban addresses for postal service, the systematic adoption of family surnames that were stable across generations (and the 20th century followup of citizen ID numbers), etc., were all for the purpose of making society transparent to the state.

Before this transformation, for example, surnames existed mainly for the convenience of people in local communities, so they could tell each other apart.  Surnames were adopted on an ad hoc basis for clarification, when there was some danger of confusion, and rarely continued from one generation to the next.  If there were multiple Johns in a village, they might be distinguished by trade (“John the Miller”), location (“John of the Hill”), patronymic (“John Richard’s Son”), etc.  By contrast, everywhere there have been family surnames with cross-generational continuity, they have been imposed by centralized states as a way of cataloguing and tracking the population—making it legible to the state, in Scott’s terminology.2

To accomplish a shift back to horizontal transparency, it will be necessary to overcome a powerful residual cultural habit, among the general public, of thinking of such things through the mind’s eye of the state.  E.g., if “we” didn’t have some way of verifying compliance with this regulation or that, some business somewhere might be able to get away with something or other.

We need a shift in focus toward creating reputational and quality assessment mechanisms on a networked basis, to make us as transparent as possible to each other as providers of goods and services—and not legible to an all-seeing state.  In fact, the creation of such mechanisms may well require active measures to render us opaque to the state (e.g. encryption, darknets, etc.) for protection against attempts to suppress such local economic self-organization against the interests of corporate actors.

To do this requires overcoming six hundred years or so of almost inbred habits of thought, by which the state is the all-seeing guardian of society protecting us from the possibility that someone, somewhere might do something wrong if “the authorities” don’t prevent it.  We need to replace it with a habit of thinking in terms of ourselves creating mechanisms to prevent each other from selling defective merchandise, protecting ourselves from fraud, etc.  In other words, we need to lose the centuries-long habit of thinking of “society” as a hub-and-spoke mechanism and viewing the world from the perspective of the hub, and instead think of it as a horizontal network in which we visualize things from the perspective of individual nodes.  We need to lose the habit of thought by which transparency from above ever even became perceived as an issue in the first place.

This will require, more specifically, overcoming the hostility of conventional liberals who are in the habit of reacting viscerally and negatively, and on principle, to anything not being done by “qualified professionals” or “the proper authorities.”

Arguably conventional liberals, with their thought system originating as it did as the ideology of the managers and engineers who ran the corporations, government agencies, and other giant organizations of the late 19th and early 20th century, have played the same role for the corporate-state nexus that the politiques did for the absolute states of the early modern period.

This is reflected in a common thread running through writers like Andrew Keene, Joran Lanier, and Chris Hedges, through the occasional offering by Thomas Frank at The Baffler, and through documentary producers like Michael Moore.  They share a nostalgia for the “consensus capitalism” of the early postwar period, in which the gatekeepers of the Big Three controlled what we were allowed to see and it was just fine for GM to own the whole damned economy—just so long as everyone had a lifetime employment guarantee and a UAW contract.

Paul Fussell, in Bad, ridicules the whole Do-it-Yourself ethos as an endless Sahara of the Squalid, with blue collar shmoes busily uglifying their homes by taking upon themselves projects that should be left to—all together now—the Properly Qualified  Professionals.

Keith Olbermann routinely mocks exhortations to charity and self-help, reaching for shitkicking imagery of the nineteenth century barnraiser for want of any other comparision to sufficiently get across just how backward and ridiculous that kind of thing really is.  Helping your neighbor  out directly, or participating in a local self-organized friendly society or mutual, is all right in its own way, if nothing else is available.  But it carries the inescapable taint, not only of the quaint, but of the provincial and picayune—very much like the perception of homemade bread and home-grown veggies promoted in corporate advertising in the early twentieth century, come to think of it.  People who help each other out, or organize voluntarily to pool risks and costs, are to be praised—grudgingly and with a hint of condescension—for doing the best they can in an era of relentlessly downscaled social services.  But that people are forced to resort to such expedients, rather than meeting all their social safety net needs through one-stop shopping at the Ministry of Central Services office in a giant monumental building with a statue of winged victory in the lobby, a la Brazil, is a damning indictment of any civilized society.  The progressive society is a society of comfortable and well-fed citizens, competently managed by properly credentialed authorities, happily milling about like ants in the shadows of miles-high buildings that look like they were designed by Albert Speer.  And that kind of H.G. Wells utopia simply has no room for the barn-raiser or the sick benefit society.

Aesthetic sensibilities aside, such critics are no doubt motivated to some extent by genuine concern that networked reputational and certifying mechanisms just won’t take up the slack left by the disappearance of the regulatory state.   Things like Consumer Reports, Angie’s List and the Better Business Bureau are all well and good, for educated people like themselves who have the sense and know-how to check around.  But Joe Sixpack, God love him, will surely go out and buy magic beans from the first disreputable salesman he encounters—and then likely put them right up his nose.

But seriously, practical questions concerning the feasibility of such a shift from state certification to networked reputational  certification systems are entirely legitimate.   Reputational systems really are underused, and most people really do take undue caution in the marketplace on the assumption that the regulatory state guarantees some minimum acceptable level of quality.

And as Michel Bauwens pointed out by email, the sudden implosion of the state and its certification mechanisms results in disaster unless there’s something in place to fill the vacuum.  The corporation and the central state have so crowded out social mechanisms, and so atrophied civil society, that there’s good reason to worry about how people will take up the slack as the old corporate-state system fades away.

But I think this seems like more of a danger when we take a static view of society.  It also helps to keep in mind that the collapse of the state-corporate system will probably not be sudden or catastrophic, but rather a generation-long process.  Given chronic underemployment and the imperative of networking in the social economy to prevent homelessness and starvation, the pressures to develop such networked mechanisms will be steady and consistent over time.  At the same time, network technologies are making such organization more user-friendly with each passing year.

I think people will be capable of changing their habits quite rapidly in the face of necessity.  Because people are not presently in the habit of automatically consulting such reputational networks to check up on people they’re considering doing business with, and are in the habit of unconsciously assuming the government will protect them, conventional liberals assume that people will not shift from one to the other in the face of changing incentives, and scoff at the idea of a society that relies primarily on networked rating systems.

But in a society where people are aware that most licensing and safety/quality codes are no longer enforceable, and “caveat emptor” is no longer just a cliche, it would be remarkable if things like Angie’s list, reputational certification by local guilds, customer word of mouth, etc., did not rapidly grow in importance for most people. They were, after all, at one time the main reputational mechanism that people did rely on before the rise of the absolute state, and as ingrained a part of ordinary economic behavior as reliance on the regulatory state is today.

In a society with rapid shortening of supply and industrial chains, of community reindustrialization through microfactories, of local production of ever larger shares of food and clothing, it would be remarkable if “friend of a friend” reputational systems didn’t regulate people’s choice of business ties.

Fifteen years ago, when even the most basic survey of a research topic began with an obligatory painful crawl through the card catalog, Reader’s Guide and Social Sciences Index—and when the average person’s investigations were limited to the contents of his $1000 set of Britannica pending a visit to the liberary—who could have foreseen how quickly Google and SSRN searches would become second nature?

5 Comments From the Regulatory State to Voluntary Certification Networks

  1. AvatarZbigniew Lukasiak

    I share your enthusiasm for decentralized systems – but for the sake of analysing the case in depth – would it not require a critical analysis of the mentioned Medieval and other traditional reputation systems and why they were replaced by state? I guess state was in some way more efficient.

  2. AvatarP.M.Lawrence

    ‘Things like the systematic mapping of urban addresses for postal service, the systematic adoption of family surnames that were stable across generations (and the 20th century followup of citizen ID numbers), etc., were all for the purpose of making society transparent to the state.

    ‘Before this transformation, for example, surnames existed mainly for the convenience of people in local communities, so they could tell each other apart. Surnames were adopted on an ad hoc basis for clarification, when there was some danger of confusion, and rarely continued from one generation to the next. If there were multiple Johns in a village, they might be distinguished by trade (“John the Miller”), location (“John of the Hill”), patronymic (“John Richard’s Son”), etc. By contrast, everywhere there have been family surnames with cross-generational continuity, they have been imposed by centralized states as a way of cataloguing and tracking the population—making it legible to the state, in Scott’s terminology.’

    No, not precisely. Rather, those things were done in a different sequence and tapped into things that people were already doing anyway, for other reasons, with a lot of cultural variation (so making the identifying project easier). For instance:-

    – Systematic mapping of urban addresses came first, a seventeenth century invention in occupied towns like Cologne to help the occupation (hence the famous brand of Eau de Cologne, 4711, based on an eighteenth century identification). Later, that approach was extended to be nearly universal on the back of the acceptability of postal systems.

    – In many areas, e.g. Celtic ones, family names were developed under the clan system to identify people and their groups to each other, and not merely important in narrow localities. In his View of the Present State of Ireland – largely about ways to control the Irish – Spenser even found this a problem and said he was sick of all those “Macs” and “Os”. Only some groups had naming systems that originated as you describe (and there were often orthogonal systems for middle names, too). Polish surnames seem elaborate, because nearly every Pole was demonstrating an aristocratic connection in a very uncentralised society (noble descent wasn’t simply passed down to the eldest son); short Polish surnames like Bem and Ral simply don’t look Polish to outsiders, though they do exist. To me, the US custom of married women hyphenating their own surnames looks wrong, because that should be confined to the children of those marriages in which each parent keeps his and her own name, to indicate the children’s ancestry; that US hyphenation is conveying false information.

    – People often warped the new strictures back into the old form, e.g. when Denmark, Sweden etc. insisted on enduring surnames, the old typical pattern of alternating, say, Lars and Jens to get Lars Jensen and Jens Larsen every other generation was kept etymologically accurate by ceasing to alternate names, giving lots of Lars Larsens and Jens Jensens. This was unhelpful for the identifying purpose of the centralisers (I have heard of the US Army bureaucratically allocating conscripts after 1942, ending up with one unit where everyone in every rank was surnamed Smith; they had been chosen alphabetically).

    – People could and did change their names to escape notice; my own surname is Scottish and developed in this way in earlier generations by anglicising “MacLaren”, which was a risky name to have after the ’45 (compare MacDonald/Donaldson). Then again, reportedly one US Vietnam veteran reversed the letters of his surname, the better to lie low after his taste of the system – only to be called up again under the new name.

  3. AvatarP.M.Lawrence

    Ah, yes! From A View of the Present State of Ireland, Part Three (written in 1596), we have:-

    “Moreover for the [better] breakinge of these heades and sectes, which I tould you was one of the greatest strengthes of the Irishe, me thinkes, yt should do very well to renewe that ould statute that was made in reigne of Edward the Fourth in England, by which it was comaunded, that wheras all men that used to be called by the name of theire sectes, accordinge to theire severall nacons, and had no surnames at all, that from thenceforth each one should take unto himselfe a severall surname, eyther of his trade or facultye, or of some quallety of his body or mynde, or of the place where he dwelte, so as everye one should be distinguished from other, or from the most parte, wherby they shall not onely not depend upon the head of their secte, as nowe they doe, but also shall in shorte tyme learne quyte to forgett this Irish natyon. And herewithall would I also wish all the Oes and the Mackes wich the head of the sectes have taken to theire names, to be utterly forbiden and extinguyshed; for that the same beinge an ould manner (as some sayth) first made by O Brin, for the strengthninge of the Irish, the abrogatinge therof will asmuch infable them.”

    It appears that Spenser considered surnames to be something rather more specific than I have taken the term to be.

  4. AvatarSteve Herrick

    Kevin, this was a particularly interesting essay. Five years ago, I did a serious analysis of the fair-trade system, and found it to be lacking. In its place, I decided the thing to create was a mutual certification system made up of a rotating and volunteer committee of distributors, consumers, and even competitors, who would make frequent site visits to each other. As it turned out, that was too ambitious to pull off. So, in its place, I founded Just Things, as the next-best way to connect producers and consumers. Unfortunately, I was only able to keep that going for a year. Still, I’m very interested in such things.

    The best example I know of this model right now is my friends at Just Coffee. They are promoting what they call “transparent trade,” in which they essentially have no trade secrets. They publish their supplier contracts, profit-and-loss statements, and more on their website, justcoffee.coop. I see this as a proactive reputation system, or a consumer certification system. And… it’s been very successful for them.

  5. AvatarRoderick T. Long

    By coincidence, I was just today reading in Rick Steves’ Prague about how Nerudova street is “lined with old buildings still sporting the characteristic doorway signs (e.g., the lion, three violinists, house of the golden suns) that once served as street addresses” that “represent the family name, the occupation, or the various passions of the people who once inhabited the houses. … In 1777, in order to collect taxes more efficiently, Habsburg empress Maria Theresa decreed that numbers be used instead ….”

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