How did we get here?
The pioneers of the Internet never meant for it to be centralised. But they overlooked the core challenge of human social organisation: trust.
Trust is the certainty not to be scammed. When you trust someone, you're sure they'll behave along the lines you expect them to.
In pre-civilised times this meant that, to stay safe, you only directly interact with friends and family. No trading information and value with strangers. If I don't know you, I don't do business with you. This capped the first hunter-gatherer societies at around 150 people: the maximum number of stable social relationships a human brain can supposedly manage (known as Dunbar's number).
Units of civilisation
When the last ice age ended around 11,000 BCE, the nomads settled down in the Agricultural Revolution. Staying put for extended periods of time gave rise to private property and valuable possession (stored agricultural output). This was the cue for trust's alter ego to rear its ugly head. The incentive to steal had never been greater. To moderate the escalating violence between stranger tribes, we came up with third parties all strangers could trust: institutions.
Institutions widen the perimeter of trust between strangers by keeping records of what happened. Who owns what, who owes what. Taxes, payments, properties, exchanges. Records affirm truth and truth constructs trust. Governments, banks, courts, religious organisations like the Church, as well as private companies scale human cooperation into large complex societies by asserting a standardised narrative. A story we can all believe in.
In this sense, institutions are the basic units of civilisation. Offline economies can't exist without them. As it turns out, neither could the first online economy. The early web too leaned into the old habit of centralised trust management shortly after its decentralised inception.
Unbounded by space and time, today's internet institutions have slashed the latency and cost of economic exchanges - unlocking instant global business. They achieve this by letting software take care of trust. We stay, ride and trade with strangers all over the world because our phones assure us we can. Through records like reviews and ratings we, the users, build a culture around a particular core interaction. This culture sets the boundaries of what each of us can ('t) do. At the very least, we won't be scammed. Best-case, the sky is the limit for collaboration.
Networked software subverts the bureaucratic, fee-collecting middleman to reward individuals on both sides of supply and demand. Strangers can transact at scale in a peer-to-peer economy. The kicker is that the networks are owned and the house still takes most of the winnings.
Institutions keep failing us because they are human
Every institution that distributes power, money or status eventually falls to bias and corruption. Centralised internet platforms are no exception. It's fundamentally self-interested human behaviour playing out at scale: a feature, not a bug. We can't trust banks, Facebook and Uber to take care of trust because we can't ultimately trust the individuals that constitute them. Especially when they can leverage laws and network effects to evade competition.
That is not a fancy way of saying "f*ck the system" nor is it blaming bankers and Mark Zuckerberg for all of the world's problems. It's bad design.