Network Law
Individually sovereign legal codes
Last post I wrote about The Freestead, using binding arbitration agreements to create a Free City in an existing country like the US. This could be used to create a separate legal and governance system that allows people within the Freestead to opt out of a substantial fraction of their standard local legal system.
Today I want to talk about using binding arbitration agreements for a related but different purpose: borderless voluntary law. This is law that individuals can opt-into where ever they are in the world. This might be particularly useful/interesting to folks trying to build a Network State.
What is a Network State?
The Network State movement talks about forming communities online and then creating physical communities in the form of startup states or charter cities and connecting these communities into a network of “nodes” of like-minded people building future societies that experiment with social and governance structures.
When I first came across the concept of a Network State, the name conjured up the idea of a state that had a singular governance structure but was distributed around the world, perhaps without set borders.
How would that work? Why would you want such a thing? How would you build a governance system that doesn’t have set borders?
You could have multiple locations around the world that choose to have a single (but distributed) legislative body, so that anyone traveling between locations can have a unified and consistent legal environment.
But this seems unlikely for several reasons. One reason is vision. Each different location will almost certainly be built by a different set of people with different vision of what it should be. These people will almost certainly want law specific to their place and their people.
But another reason is more structural: each different place around the world is unlikely to be 100% independent and sovereign, and so legal environments will inevitably differ between places to some degree, large or small. These different legal environments will make it nearly impossible to have a truly uniform legal environment across all places. Best you could do is to make them as similar as possible, if all the network state nodes want to do that.
Cryptocurrency as a voluntary borderless jurisdiction
A cryptocurrency like Bitcoin is basically a narrowly defined opt-in governance system specifically for monetary policy. Your software verifies the rules YOU want. Even if the rest of the network changes rules, your node will only accept coins according to the rules you want. And if you want alternative rules, you can do that too, and transact with anyone else who opts into those new rules.
Can we do this with broader law? What if you could choose your own code of law?
Choose your own law
I think we can create voluntary, opt-in law that operates on the smallest possible level: the individual. Just like a cryptocurrency, one could opt in or opt out, but it can cover a much broader set of rules that govern and protect numerous aspects of life.
This is what I’m calling “Network Law”. This is how it would work.
- You look through a market of legal codes, read reviews, maybe read the actual codes, and choose your favorites. Maybe you choose some based on how many other people have chosen them, or how many of your friends or business relationships have opted into them.
- You then rank your favorite codes of law by how much you like each of them.
- Lastly, you register this ranking with some coordination organization and sign a contract agreeing to be bound by those codes of law.
Then if you get into a dispute with someone, you look them up in the registry to see if they’ve registered one of the same codes you did. If the person didn’t register a legal code that overlaps with yours, then a default legal system is used (probably your standard city or county court). But if you both chose the same code of law, the case would be heard by an arbiter and judged based on this matching legal code, rather than the normal code of law. The writer of the code would get paid when its used for a case, providing an incentive for people to craft high quality legal codes.
This would create a legal system that is not only completely individual and opt-in, allowing people to opt out of much of the standard legal system in most countries, but it allows the opportunity to do this in a way that transcends national borders.
Why do this?
A system like this would do two primary things:
A. It would make binding arbitration more accessible. It would provide a standard way for individuals and businesses to opt into binding arbitration with everyone else who opts in. This gives those who opt in an alternative court system.
B. Enables alternative law, by providing a standard way for individuals to choose alternative law for themselves.
While businesses today often use binding arbitration, it is generally done differently for every contract. A Network Law system would create a standardized and legal framework that keeps contracts simpler, negotiation shorter, and dispute risks lower. This would also make it easier for businesses to offer binding arbitration as part of their customer contracts. After all, a standard 3rd party system used by numerous companies and businesses is much more trustworthy to a customer than a bespoke agreement likely biased towards favoring the business rather than the customer.
This also provides a framework for individuals who never contract directly with each other to opt into an alternative court system (arbitration), something that as far as I’m aware simply has never existed before. This alone could lead to lower cost higher quality dispute resolution.
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The alternative law this enables might be even more interesting tho. This would result in a marketplace of laws, giving businesses vastly more choice of vetted law that can reduce business legal risk.
And a business could also require customers to opt into this kind of system to reduce liabilities that haunt the normal government court systems. Businesses that do this could substantially reduce their liability risk. Much of the legal-ass-covering policies that have made life less efficient and less fun could be made obsolete, improving life for their customers as well.
For example, terms of service are often long and awful. Most people don’t read them and that can sometimes bite people in the ass. Residential lease agreements seem to be getting longer as well for similar reasons. But one of the reasons terms of service and contracts are so verbose is because of legal liability. A common legal practice is to put as much detail and specificity in a contract so cover all possible cases, rather than relying on general standards, because those general standards have been getting less and less reliable.
A company who knows their customer has opted into Network Law they approve of could use much simpler terms of service and much simpler contracts in general, because the standards in that Network Law are much clearer and less risky. Many of the polices that have come from pressure to reduce legal liability could also be alleviated.
Liability Bloat
Legal liability has gotten more and more burdensome over time. Courts often shifting the burden from thoughtless or unlucky victims of their own circumstance to the nearest organization that has money to extract seems to have gotten more common. A trend of safetyism has created a moral fervor for lawsuits for things that used to be the normal risks of life. And even winning a lawsuit can bankrupt someone.
For example, the homogeneous standardized playgrounds that sacrifice fun and developmental growth for slightly reduced risk of injury are a result of this litigation culture. This has resulted in the removal of tall slides, merry-go-rounds, seesaws, high monkey bars, etc. While few lawsuits against playgrounds were actually won by parents upset their child had gotten themselves hurt on the playground, our court system often makes accusation the punishment — winning court cases can be nearly as costly as losing them. While this hasn’t eliminated fun innovative playgrounds, it has meant they’re pretty uncommon. We could regain the “play” in “playground” by allowing a little more risk without the threat of lawfare. As Lady Marjory Allen said “Better a broken bone than a broken spirit.”
This isn’t just about playgrounds either. The same process has neutered the human spirit in all sorts of institutions and activity. Schools ban dodge ball, tag, roughhousing, snowball fights, or cartwheels to avoid lawsuits. Businesses and town squares remove deep fountains, climbable features, access to rooftops, and interactive machinery. Pools, gyms, and camps feel forced to require heavy supervision, extensive waivers for basic activities, and elimination of things like rope swings, fort building, night games of capture the flag, etc. Child daycare centers are so expensive primarily because of the requirement of a high supervision ratio.
Annoying unnecessary safety features of products, like annoying safeties on lighters, cars that nag you for not wearing your seat belt, and the myriad of useless lawyer-speak warnings on products that obfuscate any information that might actually be useful. Unopenable windows in hotels or apartments to avoid liability around suicide or climbing children. Liability is often the reason cities trim back trees to eliminate beautiful tree canopies over streets. One of the most absurd is the stripping of all low-hanging branches on trees in nature parks or trees being removed entirely in urban areas, so kids can’t climb the trees, in fear of them getting hurt by doing one of the most quintessential of wholesome kid activities.
Safetyism is part of a broader problem of government bloat. Peter Leithart of Theopolis wrote, “There is thus a symbiotic relationship between safetyism and the expansion of government authority.” Personally, I think safetyism is a result of the incentives that expand government rather than the other way around, but it is a clear symptom of the much bigger problem of undesirable and unsustainable government expansion.
The “tort tax” makes numerous things we pay for more expensive because of frivolous and predatory lawsuits. This adds $100 to the cost of car insurance policies, represents half the cost of a football helmet, 1/5th the cost of a ladder, 1/6th the cost of a pacemaker. The US Chamber of Commerce estimated that these costs add up to over $500 billion annually. No wonder hating lawyers is such a popular meme throughout the ages.
Network Law could provide a standardized way for individuals and businesses to opt out of the madness of civil liability, and opt into something fairer and far less burdensome not just by making court cases easier, less expensive, and more fair, but by removing the chains that keep people from doing the common sense things that make life worth living.
Caveats & additions
Similar caveats apply to Network Law that apply to Freesteads. Criminal law, traffic law, and custody law is usually excluded from being waivable with binding arbitration agreements. However, about 25% of court cases (at least in the US) are the kind that could be overridden by Network Law, and these are the kind that drive a lot more behavior outside of a court. Like I mentioned in the last post, binding arbitration is broadly upheld in most countries in the world.
There are also several additions I can think of that might be useful.
It might be useful to allow people to choose what specific location(s) they want to opt into this in, rather than doing it everywhere. That way they can stick with normal rule of law in, for example, first-world countries, but opt to go their own route in the 3rd world.
It might be prudent to require changes to your options to have a delay of something like 1 year to go into affect, otherwise someone could try to game the system by switching codes of law whenever it might be temporarily advantageous to them. Imagine a code of law that said the builder of an apartment building owes restitution if the walls or floors are too thin and allow noise to easily get through. If a builder previously agreed to that but then built a building that cut corners, they shouldn’t be able to then revoke their opt-in to that law on just the day they build the wall in order to escape responsibility for their corner cutting and then turn around and sue someone for the same thing when they’re on the receiving end.
Another possible addition is to have categories of law where a code of law only applies in a certain category of case, so legal codes could be more modular and one could choose codes from different sources for different categories.
A legal-code marketplace where you can see how many people have opted into each legal code and reviews of the legal codes would go a long way to helping people sort through the options. 3rd party services could even be used to advise people on what codes of law to use or even be given authority to dynamically update codes of law their clients are opted into based on recent case precedent (for example, if a flaw is found in a particular code of law). That way most people wouldn’t have to be a lawyer to choose their own code of law.
How to build a Network Law system
A Network Law system would probably consist of an organization that operates the registry. The organization would have a website where people could create an account, provide documentation of their identity, sign the binding arbitration agreement, and then choose their ranking of legal codes and probably also a ranking of private arbiters. The website could also be consulted to look up other people’s rankings so you can verify what code of law you’d be using when interacting with a particular individual. It would also be helpful for the website to maintain guidance on differences between nations and other jurisdictions in terms of applicability of the binding arbitration in important edge cases.
Network Law could also be used to improve things for existing situations where binding arbitration agreements are used, by producing better options that are more vetted and more broadly applicable than the options that currently exist. HOAs could use a system like this to allow individuals some autonomy to choose rules for themselves rather than the usual restrictive top-down rules making. And HOAs or other communities could use the system of ratings and reviews of legal codes as part of the process for determining the default rules for their community.
Locations around the world could require opting into this system, which could significantly reduce uncertainty for people who visit or frequent those places. Experimentation and competition between legal codes would also spur innovation in law leading to better incentives and better justice than our corruptible design-by-committee legislatures could ever produce. Open source law could become a thing that seriously improves legal environments around the world.
Some adjacent organizations building frameworks for governance are out there, like DAOs like Kleros or Aragon, or helping localities craft governance like Free Cities. More similar to the concept in this article are well developed binding arbitration systems in membership organizations that come along with substantial bylaws. But I’m not aware of any existing or historical system that lets individuals opt into their own law on an individual level. If any readers know of any, let me know in the comments!
I’m curious to hear from people involved or interested Network States what they think of this idea. Would anyone would be interested in opting into the system were someone to build it for real?
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