Ethereum is sneakily creating new economic system without people realising

About me

Before starting, I would just like to get a few things out of the way to know my biases and where I’m coming from.

I consider myself a socialist because of following things:

  • I believe that workers need protection from the brunt of free market
  • I think that tax policy should be written to favour demand side (i.e. money in pockets of people instead of corporations)
  • Regulations should exist to protect people from getting sawdust in bread, rotten meat and so on.
  • Worker co-ops should be the the way we organise society and governments should have policies to make it easier for people to organise in this way
  • I am strong supporter of decentralisation and especially of decentralisation of power

Regarding tokens, I currently own Ethereum, Rocket Pool token and USDC.

Intro

This is probably going to piss of a lot of people.

Mostly because I am trying to explain history of economic systems in under 1000 words and it would be charitable to call me an armchair economist.

This is written mostly for people left of center who seem to have read something about crypto scams and have lumped together indiscriminately all of them into one.

I am appealing to everyone who has that type of person to send them this article.

Let’s start.

Current system

We are told we live in a capitalist system.
This is not strictly true.
Every economy in the world (from US, Norway to China) has a mixed economy.
Some allow for more freedom for certain markets and some don’t.
Some offer more protection for workers and some less.

We might disagree on the level that democratically elected government should interfere but this is what we have now.

Brief history of current systems

Child coal miners 1911 by Lewis Hines, library of congress

Birth of capitalism (I will miss many things, that’s why it’s brief)

In the ending stages of feudalism, many areas across the world were experimenting with various free market ideas.
Some were successful and some weren’t.
These were growing pains of a budding new economic system that would liberate many out of poverty.

It was good.

Many people wrote books on how great it was and people were convinced that this was the best system they ever had (many still are convinced).

Biggest advantage was that if you had a good idea and you were poor you could seek out an investor who would provide you with capital to get you started.

Something impossible under feudalism.

Feudalists were happy because they were the ones with capital and land so they would earn money by investing and mostly by renting their land to people.

With time, a lot issues emerged.

Photo by Hennie Stander on Unsplash

Birth of socialism/communism (please don’t get mad at me, but you can at me at twitter.com/veles_eth)

There were many people critiquing capitalism as such and argued that people should put some reasonable regulations on it and others wanted to dismantle it and start from scratch.

Most famous of these people are misunderstood Karl Marx and Friedrich Engels.

They recognised that free market is not able to resolve many issues and will bring more pain and suffering than feudalism had.

One of the biggest concerns they had was one of centralisation of power which would make exploitation of workers a lot easier.

At that time, it was normal for children and teenagers to work 16–20 hours a day.

Dying from exhaustion or getting mangled by machines were common and accepted parts of life for children and grown ups.

Being unable to work was basically a death sentence.

Workers had barely enough money to survive and had to buy bread with sawdust and chalk in it.

In this environment Das Capital and Communist manifesto were written to offer some solutions.

Most notable and known propositions are (simplifying and generalising):

  • workers who provide labour should also own fruits of that labour
  • workers should own means of production
  • planned economy (to each according to their needs, from each according to their ability)

Interpretations were varied, some authoritarian governments seized means of productions for themselves and called it a day and some stuck with original idea and gave workers ownership.

This idea stuck with people.

Mixing of two systems

After a few bloody revolutions and many bloody conflicts, protests across time and continents, situation gradually improved.

Some Laissez-Faire capitalists with time gave in to workers and afforded more and more rights to them and regulations were put in place to prevent severe exploitation.

Some socialist countries (Yugoslavia) ditched state planning and had free market with strong regulations where worker-owned companies competed (this is a system I prefer).

Man, what does this have to do with Ethereum?

Ethereum is swiss army knife of blockchains.

It enables anyone to build anything they want.
It is a libertarian wet dream. Free market where best ideas thrive without red tape.

You can do whatever you want, but you will be most successful if you follow these rules:

  1. Trustlessness
    If I do something on your site, it should be done through smart contracts (code which does things instead of people). I shouldn’t trust a human to do this for me, it should be done by code.
  2. Open source
    Aforementioned smart contracts need to be open source so they can be reviewed by everyone in order to minimise trust and to hold protocols accountable.
  3. Decentralisation
    You should try and decentralise any points of your app or protocol wherever possible which means:
    — Delegating voting power away from core team
    — Distributing wealth to token holders

You don’t have to follow these rules, but odds that you will be successful by ignoring these rules are slim to none.

Decentralisation is how Ethereum is building new, better economic system.

If you used Uniswap dapp, they gave away free Uni tokens to everyone who was using it.

It doesn’t matter if you used it once or every day, everyone got the same.

Back then, airdrop per address was worth $1200.

Today if you kept those Uni tokens, you would have $12’000 from that airdrop not to mention you would have voting rights in one of the biggest and revolutionary dapps in the world

Most important aspect of that token is voting rights so it works similar to stocks.

You can check some of other airdrops here:
https://etherscan.io/airdrops

Many other dapps (decentralised apps) and protocols have done this since, creating a world where developers of the dapp, owners and users all own the final product.

Just imagine if Facebook decided and went to issue stocks to all of their users by giving more to people who have created pages and work as community organisers and also to regular users.

With this stock, you can then vote what is done with your data and where is company heading.

Quite similar to co-ops, but users have a say as well in what happens not just workers.

Here is a mind blower:

This means, we have community ownership on Ethereum, socialist wet dream achieved through free market.

We leveraged free market to give developers reign who decided that best way to go forward is to give everyone using the app a say.

This has never happened in history before.

So, if you consider yourself on economic left instead of rolling your eyes, scoffing, calling Ethereum rich man’s toy get into the space.

You can help keep Ethereum decentralised and help people keep power.

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