Can we use Blockchain to enable True Free Trade?

I recently wrote about how Blockchain could potentially be used to make optional licensure a feasible reality (though I also professed that this was based on my cursory understanding of the technology and the suggestion was in spite of my corresponding technical deficiency regarding expertise on it). However, that same logic could be applied to making Free Trade more feasible, manageable and cost-effective.

 

Indeed, it was a welcome thing to see Jacob Rees-Mogg say that regulations that were “good enough for India” could be good enough for the UK – saying more specifically that “We could, if we wanted, accept emissions standards from India, America, and Europe. There’d be no contradiction with that,” (reported by The Independent). Mr Rees-Mogg is right in terms of the importance of being able to choose one’s standards but, ultimately, it is the consumers that should be empowered so that they can pick and choose what standards they abide by.

 

After all, one of the chief complaints against the EU which true Free Traders get frustrated by is that the single market purports to be Free Trade when it actually just a selective liberalisation and not Free Trade in its purest sense (having restrictions on import standards, for example, as was rightly pointed out).

 

To re-iterate, the author does not profess to have a technical knowledge of Blockchain but is aware of it in a non-technical sense in terms of it providing a decentralized database with anonymity (to allay privacy concerns regarding a ‘Big Brother’ government, for example) but also verifiability and inability to tamper with the transaction record (to ensure trust between anonymous participants on the Blockchain(s)).

 

As such, rather than merely devolving the responsibility to politicians and policy makers to decide which laws should be kept and which ones should be scrapped and, subsequently, to regulators to enforce and interpret them accordingly, the responsibilities should be devolved directly to consumers.

 

So, for example, there can be several standards bodies run, not just by the government, but other private entities here as well as government and private entities abroad. So long as these entities verify that they have granted or not granted their approval respectively for particular products and services, the consumer, importer, exporter, producer and so on, could simply participate on the appropriate Blockchain(s) and, therefore, all participants throughout the retail and supply chain would be able to transparently verify the standards of the products and services being sold.

 

This would be unprecedented in terms of improving the ease with which trade could occur since all consumers could quickly choose whether they want to accept or reject the standards bodies by which the goods and services producers choose to abide by or not. As such, a range of standards and prices would occur which correspond to all peoples’ preferences and constraints.

 

Blockchain would also largely reduce the costs associated with maintaining and enforcing standards (so long as significant networks of people to subscribe to such a system) but would also uphold the well-intentioned purpose of centrally-imposed standards themselves since the various standards bodies would compete to ensure they provide quality and trusted standards whilst also reducing the costs associated with verifying the standards (in order to remain competitive). Furthermore, the associated products and services may well even become part of a more sophisticated Internet of Things related to the Blockchain (however, this is beyond the scope of this short suggestive article) and this would be especially desirable if the UK wishes to continue gaining prominence as a tech hub post-Brexit.

 

Can we use Blockchain to enable True Free Trade? Possibly. I’m not clued in enough on the technical side of it to come to a definitive conclusion in this article but, from my limited, non-technical knowledge of it, it’s something that could be considered when deciding on how best to replace archaic trading arrangements by using available technologies most effectively to enable a desirable situation.

 

As such, devolving power to the people (rather than simply Westminster and regulators) to pick and choose their standards would enable a situation wherein True Free Trade is possible.