ON THE ROAD TO HOLACRACY

ON THE ROAD TO HOLACRACY?

ON THE ROAD TO HOLACRACY?

There can be no society or civilisation without a common statute for it’s members, without a common legal system which rules the persons and their property. History has shown that any conqueror or coloniser feels the need to unifie its conquests, by imposing on them its own legal model. That is how the Roman legions extended the influence of the Roman law to the extreme limits of the Empire. To impose a legal model is a way to federate people of disparate territories. It is also a way to build a new legal system by deleting former model.

I. A NEW LEGAL MODEL WITHIN THE BLOCKCHAIN.

On the one hand, the actual legal world is characterised by the territoriality of legislation : the law is strictly identical for every one who lives in the same territory. But with growing globalisation, our legal organisation has to adapt. What is more, the decentralisation that accompanies the Blockchain transcends national borders. As a result, it is inevitable that the principle of the « territoriality of the law » slowly fades as the Blockchain entrenches in our life.

On the other hand, the law is a combination of norms that, at a specific moment and in a specific place, rules the status of individuals, the status of property and regulates people’s interactions. The Blockchain sets up its own law to its membres. It’s the triumph of a new law model/organisation, accepted buy all members.

But a traditionnal law model is comparable to a human being : the arrival of new immigrants or conquerors and new cultural mores have an impact on its evolution. When the Barbarians came to Roman Gaul in the 5th century, their culture and customs first resisted to the influence of Roman Law. Each groupe/individual was living according to its own legal model, was governed by the law of the group he belonged to, before « legal frictions » were so important, that one model tried to impose on the other.

Therefore, the system of law that imposes itself often opens new perspectives : the law becomes an economic tool of conquest. Also, if international economic exchanges, for example, require continuous adaptation of territorial legal systems, Blockchain, transcending boundaries, pose new problems : the mortgage and guaranties thereto require debtors to adapt their law to the demands of their creditors. The law that is exercised within a Blockchain implies an adaptation of the traditional norm, an evolution. New markets will then emerge for Blockchain economic actors.

Thus, the arrival of foreign elements in a traditional system can disrupt practices. Therefore, the law will take note of new uses and adapt before a model definitely imposes itself on the other. Important frictions are therefore expected between our traditional systems of law, common law or civil law, and that the Blockchain will set up : the unification of existing systems of law in the system imposed by Blockchain is not excluded.

The adaptation of traditional systems of law and the emergence of the Blockchain could beget a new organizational model.

II. FROM DEMOCRACY TO HOLACRACY ?

More generally, the Blockchain reinvents politics understood as a general framework of an organized and developed society. Literally the thing of all, without material territory , belonging only to the community members that compose without individual barriers, Blockchain defines a kind of horizontal model in a digital territory, a hundred miles from the centralization and the inquisition of our states. Moreover, there is no coercion force in the Blockchain, except the Blockchain itself, and its members who adhere voluntarily : the Blockchain builds consensus. Cannot it be the emergence of holacracy ?

The holacracy is a new governance model that removes the power of the hierarchy system and attributes it by a rule known and accepted by all, to clearly established roles. Work can run autonomously, without micromanagement: A rule explicits how a team decompose its work and defines roles with clear responsibilities.

The holacracy provides flexibility in governance that comes from a completely decentralized exercise of authority. In traditional organizations, managers delegate authority, but ultimately, their decisions must always prevail over those they manage. Any initiative outside the standard generally requires the approval of the boss, explicitly or or implicitly. In holacracy, authority is fully distributed and decisions are made locally by the individual closest to the front line, considered being the best able to provide the correct answer, as he knows better the problem. Teams are self-organizing: a goal is given to them, but they decide how best to achieve it internally. In this way, the holacracy replaces the traditional hierarchy with a series of interconnected but independent teams called “circles”. This change can significantly increase the ability of a company to adapt to changes and developments. The individual is at the heart of the system and further his skills, it is also his ability to make the right decision that is paramount.

The Blockchain seems to end the organizational hierarchy and aspires to create a new model, focusing on a formalized implementation of collective intelligence: decision centers no longer exist but are placed instead in the hands of self-organizing teams, with the example of a DAO.

III. REACTION OF CURRENT LAW AND ORGANIZATIONAL SYSTEMS.

“All truth passes three stages. First it is ridiculed. Then it undergoes a strong opposition. Then she is considered to have been obvious. ” Arthur SCHOPENHAUER

First, we remember the taunts of the banking system during the emergence of Bitcoin. The Blockchain, then largely likened to single bitcoin (the notions merging in the minds of novices), was left in the hands of a minority of “geeks” dishonest, bad intentioned and used to finance the black market outside of any regulation.

Then, banks have seized the potential of the Blockchain and the impact that a massive membership in a decentralized system could have on their omnipotence. The Blockchain begins to distinguish from the bitcoin. The Bitcoin remains a notion tainted by its use in the underground economy, drugs, weapons, and the darknet. However, Blockchain arouses lusts and banks and the states work together to understand it, identify it, regulate it in order to better control it. The blockchain currently undergoes the opposition of systems.

The political will of States and the banking system to seize the Blockchain reflects the fear of massive public support for a new system. Given it’s nature, it is unlikely that the states and banks seize the Blockchain successfully. Moreover, this is incompatible with the idea of Blockchain and the internationality of trade.

If the UK seems to take the lead, the Blockchain will impose itself on the States, Banks and more generally law systems in place, and not the reverse. There will be reaction more than anticipation, letting the Blockchain time to mature.

Finally, the flexibility attached to the common law will be a huge advantage allowing the system to adapt quickly and respond to the legal issues. Companies based in common-law countries will probably be the first affected by the new possibilities … In contrast, civil law system, with the burden of adjustment being the main defect, may be seriously impacted by Blockchain. France must seize the issue in order not to miss the Revolution on.

1] B. REYNIS, « Des notaires sous la common law : les civil law notaries des usa », JCP N, 28 Mars 2003 - n° 13

[2] https://fr.scribd.com/doc/295987915/Distributed-Ledger-Technology-beyond-block-chain

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