Economics of Using Blockchain in the System of Labor Relations

Abstract

The article considers the prospecting opportunities of using blockchain technology in the system of labor relations from the point of economics. The Transaction Cost Economics has been adopted as a conceptual basis for the argumentation since it deals with the category of “transaction costs” as a mandatory attribute of any economic relations with the exception of ideal socialist relations, where these are minimal. The objective of the article is as follows: based on the use of Transaction Cost Economics assumptions, to show the possibilities and prospects for using the blockchain in the system of labor relations as a transaction chain, which eliminates fraud, theft, breach of the rights, opportunism, i.e. minimizes transaction costs. In addition, the article researches into the need of updating the classical ideas introduced by Oliver E. Williamson on classes of regulatory structures that guarantee execution of labor relations due to the fact that the wide-scope blockchain implementation could prospectively reduce transaction costs so that these can be accompanied by a new form of regulatory structures, which the author proposes to refer to as a “smart contract”. The authors describe the justifications and examples of possible directions for the blockchain technology use to formalize specific aspects of labor relations subject to reduction in transaction costs. The article considers the possibilities, prospects, and grounds lacking in the possibilities of using blockchain technology in the labor relations system.