For some time people have wondered, however seriously, whether the acronym 'DAO' was at all intended as a nod to Daoism, or if it was just a coincidence of technical nomenclature. While the prevailing (albeit nascent) history of DAOs doesn't seem to indicate much intentional relation between the two terms, there is one concept which may curiously unite them, namely that of wu wei.

Specifically, the term 'wu wei' refers to the state of being in harmony with one's environment, rather than enforcing agendas which seem at odds with it. There is a certain acquiescence with nature to be discerned here, a recalibration of one's agency rather than a simple abdication of it. As such, the concept is foundational to Daoism and related philosophies.

In this article, we will explore the implications this state of mind may have in the context of participatory governance, for DAOs and other such organizations, and how the concept of wu wei may mesh well with certain principles of sociocracy. Here, I will not be prescribing any solutions per se, but rather paving some lines of inquiry, with the intention of aiding the reader as they make sense of their governance challenges.

Humility before Moloch

Social coordination is difficult, especially at enterprise and civic scales. The reasons for this are manifold, and while DAOs and other virtual organizations do face some novel challenges, this matter of social coordination has always been fraught with difficulties, be they political or logistical in nature.

Even when financial security and political liberty are not at stake within the context of a given coordinative effort, people nonetheless have opinions and egos. This is natural. To assume that individuals will rationally and comprehensively assess their own circumstances and those of their peers, to make optimally informed governance decisions, is arguably to commit the fallacy of homo economicus. Indeed this ideal mode of conduct is, often, all the less to be expected when the individuals in question are engaging in voluntary or otherwise under-compensated work.

Even if we were not beholden to our own humanity, and could operate on a purely rational basis, we would still be met with a great deal of complexity in our sensemaking and decisionmaking efforts. Whether it is a matter of delivering a product to market, or governing a polity, goal-oriented social coordination entails a wide breadth of challenges. Admitting this difficulty and facing it with humility can be important, as is recognizing that all social coordination projects, be they empires or enterprises, eventually come to an end. In fact, many don't even start.

'Aporia' is an ancient great term describing a state of perplexity one may experience when faced with a complex or confounding situation. In some of Socrates' dialogues, he systematically and humblebraggartly guides his interlocutors from a state of ersatz knowledge to a state of humble aporia, forcing them to recognize that they didn't know as much as they thought they knew. This recognition can be practiced without admitting defeat -- it just involves an adjustment of expectations. In fact, the embrace of this state is arguably a vital stage to overcoming the Dunning-Kruger effect and advancing one's knowledge.

From Making Sense to Making Decisions

Creating and running a business is hard, especially if it is to be done in an open, ethical and consent-driven fashion. Creating a geopolitical sovereignty is exponentially harder. Successful social coordination often requires sound governance systems, as opposed to more ad hoc styles of decisionmaking, and these systems need to be intentionally and consensually constructed to be seen as legitimate by participants.

For such systems to adequately meet the needs of these participants, in response to their shared circumstances, the participants need to understand their situation. Thus, a great emphasis falls on the social sensemaking processes informing the construction of these governance systems and the ends to which they will be mobilized. Accordingly, any substantive sensemaking effort ought to begin from a realization that things don't already make sense.

From an coordination design perspective, this evolution can be schematized to some extent. Governance is mostly about sustainably and prudently facilitating decisions in light of the various interests of individuals in a group, and as such it can be instrumental for certain social coordination efforts. Before such a system is activated via legally binding contracts and/or necessarily onerous bureaucracy, those involved, especially the leaders, ought to have a comfortable sense of what this system is designed to respond to. And yet, such a system needs to be in place for the group to effectively coordinate and make decisions.

Accordingly, there is a sort of feedback loop to be discerned between sensemaking and decisionmaking. And because decisionmaking tends to become more constrained by formal governance, it is arguably imperative that the group reaches alignment on key organizational matters before those constraints are imposed.

Dudes Abide Online

A joke I enjoy sharing, especially with those whose experience testifies to it, is that the term 'DAO' actually stands for dudes arguing online. While we may want a more gender-neutral phrase to acerbically make light of these ongoing coordination challenges, the demographic reality of DAOs is what it is, at least according to my experience. However, some research indicates that groups with a more even gender balance exhibit greater social sensitivity, and that this empathic attunement empowers the collective intelligence of the group above and beyond the average IQ of its members.

This distinction between empathizing and systemizing (E-S) psychologies, and how it may statistically correlate with gender, may shed a light on challenges faced in collective sensemaking and governance efforts. Speaking just from my experience, all of the DAOs I've been a part of have been male by vast majority. Might this have something to do with the prevailing tendency for DAO governance discussion to revolve around game theory, mechanism design, economic incentives, and other systems-oriented epistemologies? As what may be considered an invisible epistemic predisposition, might this highly systematic approach to governance be a yang to the under-established yin of a more empathic approach?

Of course, it is worth noting how the technology industry naturally attracts people who epistemologically skew toward the systematic side, and how this may constitute something of a selection bias baked into the nature of the domain itself. In other words, if technical fields tend to skew toward the neurodivergent, and if the "extreme male brain" hypothesis of autism is accurate, it may help explain why these fields are especially male-dominated. However, this line of inquiry can run the risk of cementing an epistemic gender essentialism into our discourse.

Social coherence in a group is arguably what allows that group to scale its operational efficacy beyond the sum of its parts. Whether or not we take the position of the E-S theory, and the implications that has regarding gender, a substantive part of this coherence is a balanced psychological diversity of the people involved. Where many of the existing governance conversations are dominated by systems-oriented psychologies, perhaps we would benefit from a greater presence of communication-oriented and facilitation-oriented psychologies. Here, it is worth considering sociocracy as part of the solution.

One of the popular methods for DAO governance has been optimistic governance, or lazy consensus, wherein a proposal passes by default, unless stakeholders actively vote to stop it. This method seemingly gained prominence as a reaction to the challenges of voter fatigue and poor governance participation. Quorums introduce friction by design, in that it demands participation and scrutiny to guard against imprudent proposals, but sometimes enforcing a quorum entails unnecessary friction. In this respect, governance design is a largely circumstantial matter.

Where lazy consensus passively assumes the consent of stakeholders, other methods actively court the consent of stakeholders. One example is sociocracy, a school of governance theory and methodology driven by consent, aiming to integrate and align the various interests of stakeholders. While most DAO governance thus far has involved technologically elegant systems to facilitate governance in a trustless manner, perhaps what has been ironically lacking is the trust-building involved in methods like sociocracy. Here, communication is critical, as is the manner in which this communication is facilitated. The process of critical dialogue requires not only the logic-oriented efforts of analyzing and reconciling arguments, but also the empathy-oriented efforts of actively listening to people and, just as importantly, letting them feel heard.

These consent-seeking processes of sociocracy may entail some scaling difficulty for larger organizations, even if the organization in question takes a pod-based or holacratic structure. That said, such an approach may prove useful for appropriately sized teams which stand to benefit from greater alignment and coherence. There seem to be some natural limitations on the number of meaningful high-trust relationships a person may maintain, and if effective sociocratic collaboration builds and builds upon trust, then it may prove difficult to scale such practices beyond such natural limitations.

In the context of DAOs and other horizontally integrated organizations, consent between stakeholders is especially important. In these contexts, a governance framework may owe its skeleton to formal legal structure, but its meat consists of the social legitimacy obtained by intersubjective consent. If people don't fundamentally consent to the governance framework defining the bounds of their participation, then the depth and breadth of participation may suffer.

Going with the Flow of Governance

While smooth facilitation methods and elegant governance processes may set the stage for substantive and efficient collaboration and governance, it ultimately relies on the will and conduct of participants. In this sense, a well-designed organizational framework can stigmergically prime its participants to efficiently collaborate; but beyond this, how should individuals conduct themselves as governance participants?

This is where the concept of wu wei reenters the picture. Given a sociocratic facilitation context, and a participatory governance framework, individuals will face opportunities to consent or dissent to proposed courses of action. Where wu wei generally describes a state of alignment with perceived flows of nature, in the context of collective agency, such as DAOs, these flows can be understood as social currents or momenta.

To embody wu wei as a governance participant is not merely to concede to perceived majority will, but rather to be cognizant of such trends and to be intentional about when to consent or dissent, in light of the costs these decisions have on collective momentum. For example, if a given proposal is picking up momentum among my collaborators, but I have doubts about how beneficial its consequences would be, I would ask myself whether my reservations are strong enough to warrant dissenting to the proposal, jeopardizing its execution, and costing us whatever positive outcome it may have had.

In other words, embodying wu wei in the context of participatory governance means only introducing friction and criticism when necessary, and otherwise supporting the momentum. The intuition around gauging when and how to express dissent, to best advance the shared mission of the group, is a skill refined, above all, by experience. For early stage organizations with minimal funding, the opportunity costs of expressing dissent may prove expensive, and entail higher risks of burnout than in organizations with longer funding runways to justify a greater depth of deliberation behind operational decisions.

Effective group coordination is complex, especially in a consent-driven manner. People operate at their best when they feel their efforts are purposeful and duly recognized, but facilitating this at scale, while also productively coordinating these efforts, is often prohibitively expensive and complex. Organizational methodologies like sociocracy offer various techniques and practices, for DAOs and other participatory governance contexts, but ultimately it depends on the individuals involved, and the psychological diversity thereof, to build and sustain a culture of empathy to undergird the more analytic and operational work of their shared enterprise. Wu wei presents a useful philosophy to guide individuals as they co-develop this organizational culture which lets everyone operate at their best.

This all amounts to no small task, and indeed a great deal of human conflict can be understood in terms of this difficulty; but the resulting feelings of collective purpose and productivity are no small rewards.

I would like to thank Kristen Pavle, Michael Strumberger, Ronen Tamari, CStreet.eth, moreReese, Alex Soto, as well as Opus Collective and the Sensemaking Scenius, for their insights and expertise regarding various topics included in this article.

Wu Gwei, or Going with the Flow of Governance