Collapse as a Service
When transaction costs fall, meaning has to find a new container
As information costs collapse, so do the structures built to manage them.
Lower information costs mean it's easier to find people, share knowledge, and make decisions—so the costs of transacting drop too. When information flows freely, coordination doesn’t need as much scaffolding.
The firm, the school, the nation-state—all of these were historically optimized to reduce transaction costs. That’s Ronald Coase 101: you build hierarchy when coordination is expensive. When it’s cheap, hierarchy becomes dead weight.
In plain terms: when it's hard to find people, align them, and get things done, you centralize everything under one roof. You build a big org to smooth out the chaos. But when coordination becomes easy—when everyone’s connected, searchable, and automatable—you don’t need the roof anymore.
We're now living through the great unbundling. What started in labor—the gig economy—has metastasized into something much bigger: the gig-ification of everything. Work, identity, community, even memory, are all becoming modular, disposable, and interoperable. The self is no longer a stable cache. It's a stream.
Education? A playlist. Career? A stack of side quests. Citizenship? Maybe just an API key. Belonging is turning into an opt-in overlay. The things that once grounded us are being reconfigured into systems of real-time choice.
This isn’t necessarily collapse—it’s a reformatting. A society built on persistent friction now runs on adaptive coordination. Coherence isn't gone; it's changed form.
That said, it's easy to underestimate the persistence—and adaptability—of traditional institutions. Nations, schools, and firms aren’t just coordination machines. They’re carriers of meaning, continuity, and shared identity. They bind people across time, embedding individuals in a story larger than themselves. When you lower transaction costs, you don’t just change how people coordinate—you start to dissolve the rituals and shared myths that kept them coherent. Decentralized systems aren’t necessarily fast—they’re often slower and messier than centralized ones. But when they work, they’re more resilient. Still, they’re thin—technically functional, but emotionally and symbolically hollow. They lack the thick layers of meaning, ritual, and identity that traditional institutions embed over time. They haven’t yet figured out how to generate thick meaning—the kind that lasts, anchors, or binds. Protocols may be efficient, but they don't yet sing the way traditions do.
Still, even thick meaning can wear thin when the frame holding it up starts to dissolve. And no frame is under more pressure than the nation-state.
States emerged to centralize authority, enforce norms, and pool resources for large-scale coordination—war, infrastructure, welfare. But all of these functions assumed high transaction costs. Bureaucracy made sense when alternatives didn’t exist.
Now? Those same states are struggling under their own weight. Rules multiply for the rule-followers while actual enforcement withers—law-abiding citizens feel trapped, while crime flourishes. Public infrastructure decays. Birthrates fall. Taxes rise. Debts spiral. Regulations balloon. Governance starts to feel more like a legacy system—overbuilt, underperforming, and wildly out of sync with the speed and texture of digital life.
Meanwhile, platforms coordinate faster than governments. Protocols distribute trust more scalably than bureaucracies. If the state can’t compete on coordination, it loses ground to nimbler forms of governance—DAOs, mega-platforms, corporate networks, or loose digital tribes.
Borders are slow. Algorithms are instant.
The state begins to look like just another app you can quit.
We’re not there yet. But we’re heading somewhere weird: a world of floating agents contracting with each other ephemerally, probabilistically. Institutions dissolve into protocols. Norms into toggles. Citizenship into a subscription tier.
It’s not dystopia. It’s just different.
Not fragmentation—recomposition.
Everything becomes plug-and-play.