Code is not law

I’m fond of Lessig’s saying that “code is law” and I often mention it on the blog. But there’s a deeply distorted version of this idea cropping up in crypto lately and it’s worth distinguishing it from the original meme.

Lessig’s idea was that human behavior was affected by four types of “governance” including markets, laws, norms, and what he called “architecture.” Architecture (if I’m remembering the book correctly) encompassed stuff we built in the physical world that affected human behavior. If I build a speed bump, you might drive differently; if I build a skyscraper, it might affect your view or change your walk to work or what-have-you. The things we build impose certain constraints on us — they shift how we behave.

Lessig then argued that in the digital world, code was the architecture. You could make some things possible or impossible, easy or hard, through the way the software was built. Code became a form of digital governance, alongside markets, laws, and norms.

Compare that to the crypto-maximalist version of “code is law,” which holds that anything the code allows is fair game. Here, via Matt Levine, is the defense provided by a trader who allegedly rigged a crypto market in a way that clearly would not be allowed in any normal financial market:

I believe all of our actions were legal open market actions, using the protocol as designed, even if the development team did not fully anticipate all the consequences of setting parameters the way they are.

You see the logic here: If you wanted what I did to be illegal, why did you write the code to make it possible? This is code-is-law maximalism.

There’s a less maximalist, dorm-room version of this that you sometimes see in crypto that maybe deserves some consideration. This version doesn’t argue that anything the code allows is OK. But it does say we should rely more on code for our regulation. It wants code to play a bigger role in setting the rules, bringing us closer to a world where anything the code allows is OK — even if we’re not there yet and even if we never get all the way there. I’m OK with a bit of utopianism and so I don’t mind entertaining this as a thought experiment. But so far crypto has mostly served to show why anything the code allows is OK is not OK.

To see just how damaging this maximalism is, compare it to a totally different case:

The U.S. Supreme Court on Monday let Meta Platforms Inc’s (META.O) WhatsApp pursue a lawsuit accusing Israel’s NSO Group of exploiting a bug in the WhatsApp messaging app to install spy software allowing the surveillance of 1,400 people, including journalists, human rights activists and dissidents.

If you exploit a bug to do bad things, you can’t just hide behind anything the code allows is OK. In this case, we’re talking about the murky world of international affairs where law is less effective. No one thinks this is a good thing: the world of international espionage is much closer than other spheres to anything the code allows is OK and no person in their right mind would want to run the rest of an economy that way. Code is law maximalism forfeits three-fourths of the original code-as-law formulation: Governing human behavior is hard, and we need all the tools we can find. As much as code increasingly does govern our behavior, laws, and incentives, and norms are all still essential.

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