The Meaning of "Charity" Behind Decentralization: A Path Toward Power Balance and a Multipolar World

As Vitalik Buterin points out, the greatest dilemma we face is seeking progress while fearing the three core forces that have driven that progress. The meaning of philanthropy in resolving this contradiction is not merely about allocating funds but about strategically reconstructing the balance of power.

The Clash of Three Forces in the Modern World

We have complex feelings toward “big corporations.” We desire their products and services, yet remain wary of monopolistic ecosystems worth trillions of dollars and companies that manipulate politics for profit. At the same time, we fear “big government.” Maintaining order is necessary, but we are dissatisfied when power arbitrarily designates “winners” and “losers” and restricts free speech and thought. We also cannot ignore the power of “mobs.” While we recognize the value of civil society and independent institutions, we oppose populism and extreme demagoguery.

Essentially, we face a dilemma: we need forces pushing in three different directions, but want to prevent any one from becoming overly concentrated. The fundamental idea for addressing this complex situation is the concept of “balance of power.”

Ideally, the powerful forces driving societal development should check each other. Competition among companies, constraints among different powers, and the combination of multiple mutual restriction mechanisms create the most robust social structure. Historically, geographic distance and the high costs of coordinating large organizations naturally prevented excessive concentration of power. However, in the 21st century, these historical brakes have failed. Digitalization and automation have made the three forces even stronger, while also increasing the frequency of their interactions exponentially.

“Soulless” Companies and the Meaning of Loss of Diversity

Criticism of corporations generally falls into two categories. One is the critique that companies are “intrinsically malicious.” They are efficient “goal-optimization machines,” and as they grow, the divergence between maximizing profits and serving the broader interests of users and society widens.

Examples include internal distribution ratios in crypto projects, the slot-machine-like mechanics in the video game industry, and the commercialization of prediction markets for sports betting—all illustrating how companies gradually shift from initial “enthusiast spirit” to profit-driven motives.

The second criticism concerns the phenomenon of companies “losing their soul.” As companies expand, uniform architectural styles, formulaic Hollywood movies, and urban homogenization lead to a disappearance of diversity across fields. The fundamental causes of this “soullessness” are twofold. One is “motivation alignment”: when all companies are driven solely by profit motives and lack strong countervailing forces, they tend to move in the same direction. The other is “organizational structure convergence”: as scale increases, companies develop incentives to shape their environment, and their investment scales surpass those of hundreds of small competitors combined.

When these two mechanisms combine, a company’s “soul”—that is, diversity—disappears. But what is “soul”? It is essentially heterogeneity among companies, or diversity.

The Role of Philanthropy in Constraining Government Power

The core principle of liberal theory for centuries has been that governments should be “rule-makers,” not “game participants.” In reality, governments can never remain perfectly neutral. Especially when facing external threats, governments must temporarily assume the role of “participant.” The Roman dictatorship system was an experimental solution to this dilemma.

Interestingly, in the relationship between corporations and governments, philanthropy plays an unexpectedly significant role. Capitalist democratic systems are fundamentally about the balance of power between “big corporations” and “big government,” and entrepreneurs gain independent agency by concentrating capital.

The ideology called “Parrhesia” (boldness or frankness) is not merely about praising the wealthy but about idealizing entrepreneurs and capitalists who “transcend common sense, pursue concrete visions, yet do not seek immediate profit.” The Starship project exemplifies this. Governments created the necessary conditions, markets recognized the opportunities, but ultimately, the success was driven not by profit motives or government directives, but by individual vision and philanthropic spirit.

Philanthropy fills the gaps ignored by markets and governments. Markets are reluctant to fund public goods, and governments do not fund projects lacking social consensus or companies whose beneficiaries are not limited to one country. Wealthy individuals’ philanthropy becomes a vital force filling this void, serving as a third pole to maintain the overall balance of power in society.

However, philanthropy can also become corrupt. As seen in recent Silicon Valley, some CEOs of powerful tech firms and venture capitalists have abandoned the original “liberal spirit” and actively push governments to align with their preferences. This represents a dangerous shift where philanthropy transforms from a check on power into a tool of dominance. Ideally, philanthropy should function as a third force that maintains the balance of power, strengthening mutual constraints between markets and governments.

The Vicious Cycle of Power Concentration Driven by Economies of Scale

The primary reason behind the rise of America in the 20th century and China’s development in the 21st is simply “economies of scale.” Countries with large scales and cultural homogeneity enable companies to rapidly expand to hundreds of millions of users, securing continuous competitive advantages.

From a human development perspective, we need economies of scale because they are the most effective way to promote progress. However, economies of scale are a double-edged sword. Small initial differences can exponentially widen over time. If your resources are twice as large as mine, the progress you achieve could be more than twice ours combined. Over the next year, this gap will grow even larger. In the long run, the most powerful entities will dominate everything.

Historically, two forces countered this vicious cycle. One is “diseconomies of scale”: large organizations tend to become less efficient in many aspects, affected by internal conflicts of interest, communication costs, and geographic distances. The other is the “dispersal effect”: as people move between companies and nations, they take knowledge and skills with them. Developing countries can “catch up” through trade with advanced nations, and through industrial espionage and reverse engineering, innovations diffuse.

However, in the 21st century, several decisive factors have shifted this balance. Rapid technological advances exponentially strengthen economies of scale effects, and automation allows a small number of people to complete global tasks. The most critical change is “control of proprietary technology.” Whereas in the past, product delivery to consumers inherently permitted inspection and reverse engineering, now software and hardware can be “licensed for use only, with rights to modify and control retained.”

In short, the spread of “ideas” has never been greater, but the dispersal of “control” has never been weaker. This creates the greatest risk of power concentration in the 21st century.

Technology Dispersal: Strategies to Counteract Power Concentration

The core dilemma is clear: how to achieve rapid progress and a thriving civilization while avoiding extreme concentration of power. The answer is simple: forcibly promote more “dispersal.”

At the policy level, some initiatives have already begun. The EU’s mandatory USB-C standardization increases the difficulty for companies to build proprietary ecosystems. The US’s ban on non-compete agreements forces companies to “open up” tacit knowledge among employees, allowing knowledge and skills to benefit society when employees leave. Copyleft licenses (like GPL) require software built on open-source code to remain open-source.

Even more innovative strategies are possible. Governments could tier taxes based on the “degree of proprietary control” of products, offering zero tax rates to companies that share technology with society. A “Intellectual Property Harbor Tax” could tax intellectual property based on its valuation, encouraging owners to utilize it efficiently.

A more flexible approach is “counter-compatibility,” which involves developing new products and connecting with existing ones without the permission of the original manufacturers—examples include alternative app stores, third-party compatible parts, and independent repair services.

In Web2, much value is extracted at the user interface level. Developing alternative interfaces that interoperate with platforms can allow users to avoid the platform’s value extraction mechanisms while remaining within the network. Sci-Hub exemplifies this “forced dispersal,” playing a crucial role in achieving open access in science.

Diversity as a Path to Distribute Power

As a third strategy to enhance dispersal, Glen Weyl and Audrey Tang advocate the concept of “diversity.” This means promoting “cooperation among heterogeneous groups.” In other words, enabling people with different opinions and goals to communicate better and collaborate more effectively.

According to this idea, one can enjoy the efficiency gains of participating in large groups while avoiding the pitfall of “large collectives degenerating into single-purpose entities.” Open-source communities, federated nations, and other non-unitary organizations can increase their “dispersal level,” share more economies of scale, and maintain internal diversity.

This strategic thinking resembles, at first glance, Piketty’s “r > g” theory (returns on capital exceeding economic growth) or the argument for solving wealth concentration through global wealth taxes. But there is a fundamental difference: we focus not on “wealth” itself but on the “sources of unlimited wealth concentration”—the means of production.

What we need to disperse is not money but the means of production. This strategy is superior for two reasons. First, it directly addresses the dangerous combination of “extreme growth” and “exclusivity,” potentially improving overall efficiency if properly implemented. Second, it is not limited to specific powers. While global wealth taxes might curb billionaire power, they cannot constrain authoritarian governments or other multinational entities, leaving us more vulnerable when facing such forces.

Philanthropy and Decentralization: Foundations of a Multipolar World

“Enforcing technological dispersal through a global decentralization strategy” is a more comprehensive and sustainable way to address power concentration. It means clearly communicating to all forces: “Grow with us, share core technologies and network resources at a reasonable pace, or develop in complete isolation and be excluded.”

A multipolar world faces theoretical risks. As technology advances, the number of entities capable of causing catastrophic damage to all humanity may increase. As global coordination weakens, the likelihood that some entity will choose to carry out such damage rises.

Some argue that “the only solution is to further concentrate power,” but this is a mistaken choice. Instead, a multipolar world where multiple powers mutually constrain each other and preserve diversity will, in the long run, produce the most stable and resilient world order.

The true meaning of philanthropy is not merely fund allocation but serving as a vital foundation supporting such a multipolar power structure. Filling gaps overlooked by markets, constraining government dictatorship, and strengthening civil society’s diversity—this is the real significance of philanthropy and the essential force for realizing a decentralized society.

Only through the combination of decentralization and diversity can we balance progress and freedom, efficiency and plurality. Building this new paradigm is the greatest challenge—and opportunity—of the 21st century.