True, but it doesn't make sense to throw out the baby with the bathwater.

From what I've seen being argued about proponents of defi (or smart contracts) is they operate on the premise that the centralized authority is the bad actor.

While this is true in some cases, it's not all cases, and despite it's flaws there is still a need for centralized authorities to arbitrate.

The issue with centralized authorities that has to be mitigated somehow is that, once they appear, they tend to accummulate more and more power, and inevitably become a bad actor eventually, even if originally they weren't intending to.

A decentralized approach to this is to have the hierarchy of authority organized bottom-up rather than top-down. The hierarchy can then be toppled by "pulling the rug" at the bottom-most layer when it becomes abusive. OTOH centralized hierarchies tend to fight this by promoting principles such as "democratic centralism" (where all decision making has to flow up before it flows back down, allowing to control it at the top).

> The issue with centralized authorities that has to be mitigated somehow is that, once they appear, they tend to accumulate more and more power, and inevitably become a bad actor eventually, even if originally they weren't intending to.

Which is why we have a democracy so that rulers don't have to worry about getting killed in a rebellion and people can choose a new ruler when corruption gets bad enough.

This of course means that corruption tends towards the highest people can tolerate. So if you see corrupt politicians it is because people tolerate it, if they wanted they could vote them out but people as a group don't care enough to actually do the work necessary to do so. However if corruption grew large enough as you fear then people would start caring and things would change rather quickly.

What we actually have is representative democracy, where the choice is often nominal, and leaders generally come from the same class in practice (and represent the interests of that class). So the fact that people don't "vote them out" is not an indication that they don't care enough - they might care but not have the choice that would reflect it.

It is also susceptible to "don't let the other guy win!" type of propaganda, especially in FPTP electoral systems like the American one. So long as you can find enough emotional wedge issues to ensure that your base will never even contemplate voting for "the other", you can basically do whatever the hell you want.

They can't do whatever they want. They can do more than you'd want them to be able to do, but they can't just take billions of dollars and put them in their own pockets. Company bribes makes every American politician a multi millionaire, sure, but if they could do what they wanted they would be multi billionaires like the rulers of Russia and China.