On this topic I would recommend one of Scott's most well-known essays, Meditations on Moloch [1]. The meat of it is this:
> …in some competition optimizing for X, the opportunity arises to throw some other value under the bus for improved X. Those who take it prosper. Those who don’t take it die out. Eventually, everyone’s relative status is about the same as before, but everyone’s absolute status is worse than before. The process continues until all other values that can be traded off have been – in other words, until human ingenuity cannot possibly figure out a way to make things any worse.
If top-town authoritarianism is at one extreme of the spectrum, then completely decentralized systems is the other undesirable extreme, equally bad if not worse: if there is no regulation, then there is no strong coordination, and a race-to-the-bottom situation ensues (in optimizing for X). If everyone is acting game-theoretically optimally, then anyone who tries to improve the situation gets eliminated. It might be locally optimal, but it's highly unlikely to be globally optimal.
Decentralization means being a slave to no one, which means being a slave to the incentive system, which means being a slave to everyone else.
But I would also encourage thinking of it not as a dualism, a strict choice between bureaucracy and blockchains, but as a spectrum instead. This means that there's an entire world of valid choices in between. I would very much argue that the optimum can be found just by moving closer to the middle.
[1] http://slatestarcodex.com/2014/07/30/meditations-on-moloch/
This isn't true at all. The fact that the efficient market hypothesis doesn't seem to hold is already the proof of that, and the same reasoning applies to other social behaviors [4].
Furthermore, many, many, many, many studies in neuroeconomics and behavioral economics (and related fields) [1] have shed light on the bounded rationality of human actors in decision making. Game-theoretically optimal decisions is a specific, well-defined thing that's different from making decisions based on the affects and biases of the preconscious and unconscious. You can't just tautologically define "game-theoretically optimal" to be whatever decision someone ends up making.
What does this mean? The direct implication is that it's neither game-theoretically optimal nor inevitable for stateless humans to enter into a social contract that eventually cements itself into a state apparatus.
A top-down authoritarian doesn't get their powers from a deity, yes, but it wasn't quite explicit coordination either. To demonstrate using a brief example, one of the models of the evolutionary stages of the social contract [2][3] is that states were a natural conclusion of tribal societies, which were themselves a natural conclusion of lineal societies, i.e. families. Lineal societies most likely weren't formed through explicit consent, i.e. early stateless infants probably didn't explicitly decide to enter into a social contract. There's basically no particular a priori reason why families exist (for example, the Ik people in Uganda seem to have no or a very weak concept of using familial relations for survival, even to protect their young), and very likely that this evolution was just the model happened to win out due to random noise in history rather than actual optimality.
Again I would like to stress how much the current societal configuration is mostly just noise instead of signal.
[1] For an introduction, https://www.goodreads.com/book/show/11468377-thinking-fast-a...
[2] https://mitpress.mit.edu/books/nomadology
[3] https://www.goodreads.com/book/show/118317.Anti_Oedipus
[4] http://slatestarcodex.com/2017/11/30/book-review-inadequate-...
Yet now you write that everyone acting game-theoretically optimally is not actually possible.
So you were criticizing an impossible scenario?
Since I agree with you that literally everyone acting game-theoretically optimally is impossible, I took your earlier use of the concept to mean something possible, that is, everyone acting as close to game-theoretically optimally as they are capable, and used the concept in the same way.
The multipolar trap manifests itself in real life in lots of simple ways already. The original essay has some examples, but the tragedy of the commons is the quintessential example.
The multipolar trap as a totalizing behavior is not an impossible scenario, but just currently infeasible for most sufficiently complex scenarios given the bounded reality. Which means it becomes a cause for concern as the bounds on rationality increase (through computation, through organization, etc.). That's why we should be wary of decentralized systems in the long run.
What you said was "everyone" was always acting game-theoretically already and therefore that what we currently have is game-theoretically optimal, which is what I disagreed with.
Coordination doesn't imply regulation, conventions (which doesn't imply any chief/judge) are sufficient.
Top-town authoritarianism is IMHO worse than decentralization.
My thought here is that improving situation doesn't have to happen in the game. One can step out of the game and offer a new one.
I.e. the quoted judgement about decentralised systems is not as grave if you don't look at them as closed systems.
The irony is that bitcoin, the pioneer, confirms your hypothesis because it relies on a form of intentional waste (POW) to disincentivise bad behaviour. PoW is the new bureaucracy.
I do think we will find better ways, and decentralisation is the natural outcome.