In the new information era, technological innovation is transforming the very nature of our economy and its incentives. Scarce inputs no longer dominate markets, calling into question even the most fundamental economic models of efficiency and value maximization. This study examines four classical “evils” of social welfare, traditionally considered intractable under market capitalism: (1) wealth redistribution, (2) the principal-agent problem, (3) the institution of property rights, and (4) the provision of public goods.
We reframe these issues as regulatory challenges posed by concentrated monopolies, now exacerbated by the evolving nature of the global economy. We hypothesize that Decentralized Ledger Technologies (DLTs) represent a new type of digital institution with the potential to offer innovative solutions to these problems. By enhancing personal agency and resilience, realigning market incentives, and restoring genuine competition to the free market, DLTs could address the limitations of traditional economic structures.
This study analyzes four unique cases of digital institutions built on DLTs, each designed to tackle the classical “evils” outlined above.