Elinor Ostrom got her Nobel for showing how a "commons" could be best managed. Now she inspires blockchain developers


One of the aspirations of the localizers, civic empowerers and autonomists that we seek out and promote in A/UK is towards the creations of “commons”. A commons is as old as human civilisation, and as new as a digital archive. But it essentially implies a community actively managing its assets (be it land, fish, images or code).

This is done in ways that makes it sustainable for all involved, but which places a higher than normal expectation on the commoners. They must act responsibility, and behave well enough not to despoil or over-use the resources of commons (as opposed to their more neutral transactions with the marketplace, or with the state).

The only female Nobel Prize winner in Economics, Elinor Ostrom, was the great theorist of the commons across human history. Ostrom won her award because she showed how complex and cultural the management of a successful commons needed to be.

It needn’t involve the “tragedy of commons”, as Garrett Hardin’s famous paper put it, where short-term individual rapacity ruins the resource for the long-term benefit of the community. But there are a set of necessary condtions that have to be followed for a commons to be a continuing success.

Elinor Ostrom

Elinor Ostrom

Ostrom laid them out very clearly before her death. They are now beginning to inspire a whole new generation of software technologists, who want to strongly steer digital infrastructures towards empowering communities directly. (This is a reaction to the internet’s seeming capture, in recent years, by states and corporates, both following a model of what Shoshana Zuboff would call “instrumentarianism”).

A few are striving to weave Ostrom’s principles of the commons into the strong code that we know as “blockchain” or “crypto”. They look to the increased security and robust rules for behaviour that are built into blockchain, as equivalent to the strong expectations that are made of the best commons, and commoners.

This software is beginning to go under the name of “Ostrom contracts” - and though they’re not easy to understand, we thought we’d at least try to show you their background thinking. Our general interest is in bringing powerful infrastructure and tools to the hands of active citizens and locals - so let’s see if there’s any promise here.

First, here’s a graphic from David Dao, one of the great advocates of the fusion between blockchain and classic commons thinking. It’s the Eight Principles of An Effective Commons, distilled from Ostrom's work, and taken from his Medium blog:


What worth noticing, straightaway, is the amount of care and attention given to mechanisms that can monitor, sanction and resolve behaviours and disputes. Also, there’s a realism about how the authority within the commons has to be respected by some body outside of it. And also how much “responsibility” is expected throughout the systems. A commons is far from some soft ideal - it’s a commitment.

Dao them maps the Ostrom principles - and matches the colours of its concerns - over towards the kinds of mechanisms that characterise blockchain culture:


Instantly, you can see - if you recognise some of the elements of blockchain software - that it’s not a bad match at all. One way to “define clear group boundaries”, as Ostrom puts it, is to given each member a share of the “tokens” or “currency” that can define your involvement in a blockchain.

The blockchain founders have to establish rules that protect their particular domain, and compel behaviours that will do so (Ostrom's rules 2 and 3). But they might lean on AI/machine learning to help those rules and behaviours be monitored (Ostrom rule 5), rather than courts and councils and committees.

Those who break the rules, in Ostrom’s model, must face sanctions, and submit themselves to “low-cost” resolutions of disputes. What’s the blockchain equivalent? Dao suggests that the blockchain software could automatically, algorithmically subtract tokens for poor behaviour. Or that software could set up the opportunity for another token-holder to challenge behaviour, in a time-limited way.

Does this begin to sound like the familiar objection to blockchain and smart contracts - that it devotes to automated algorithms decisions that could/should be make by humans? It relies too heavily on a “computer says no” model? Dao anticipates this, and talks at the end of his paper about loosely coupled and tightly coupled Ostrom contracts:

Ostrom contracts aim to encourage cooperation and self-governance. Smart contracts serve as a transaction and governance medium for people to self-organize and vote. However, we differentiate between two options: In loosely coupled Ostrom contracts, this is where the power of smart contract ends. It is up to the community to enforce and implement voting results and punish rule violations.

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Tightly coupled contracts go one step further and enforce execution. Everything would be automatic and there would be no human in the loop anymore. We think that full automation is extremely promising as it completely ensures trust in the system (removing the need for all trusted third parties). However, such a system can have very dangerous side effects as the incoming data flow and AI (Oracle) have been shown to be vulnerable to biases and adversarial attacks.

That would be a problem…

This paper from another source - When Ostrom Meets Blockchain: Exploring the Potentials of Blockchain for Commons Governance [download PDF here] - lays out its own map-over of commons principles to blockchain functions in this grid:

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The authors here also agree with Dao’s worry about a “tightly coupled” Ostrom contract. “Which aspects should remain in/off the blockchain, or furthermore completely in/out of code?” In short, where in this automated loop should “humans say no [or yes]”? The “predominant techno-determinism” that marks blockchain practice perhaps considers too lightly “the power of self-organisation of communities”.

But the levels of trust implied by the history of well-managed commons are high. Could there be automatic, intelligent software which a community running a commons could “trust”, enabling them to work at levels beyond the particular geography and culture they’re embedded in? Or not?

We will watch this encounter - of Ostrom with the blockchain - with interest.