Let’s talk about capitalism.
Everyone has an opinion on it. Definitions, of course, vary according to personal agendas; its merits (or lack thereof) are even more hotly contented depending on what quadrant of the Nolan political compass the subject leans towards.
Today, however, I want to focus on the future of capitalism, specifically the near future of capitalism that is being enabled and accelerated by the advent of the so-called “web 3” era of digital connectivity. From a technical perspective, technologists and engineers will tell you that “web 3” refers to the ear of distributed computing or “decentralised” networks and all that. And, while they are, technically, for the most part, correct, these sorts of definitions fail to explain what these definitions fail to explain how these technical nuances will actually affect you and I and the way we connect with each other. From my vantage point as a social and economic analyst, perhaps the most tangible difference we will actual experience in the glorious globally decentralised network state of the future as we move from “web 2” to “web 3”, centres around value. Specifically, who and what gets valued and how that value will be priced and traded.
To explain further, looking at this same question, the “web 2” era, that is the internet and digital connectivity as we know it, was all about using economies of scale to give us, what the more popular pop futurists liked to call, “digital abundance”. It was about cutting out the old middle men embracing the creative commons, and, ultimately, getting things for free, or for far below “real cost”. Yes, I know it didn’t always feel like that, but when you consider the eye-watering cost of an international phone call in the pre “web 2” dark ages before Skype, WhatsApp, and Zoom made face-timing free, or reflect on that fact that the big tech marketplaces (like Uber and Facebook, for just a couple of examples) we use to get convenient goods and services in the on-demand economy subsidise the costs of those goods and services by either operating at a loss or getting advertisers to effectively sponsor us, it’s hard to deny that overall, if you don’t care too much about things like privacy, “web 2” was a jolly good deal for the consumer, who got to consume more for less. Freemium business models were the game of the day.
“Web 3” however, is just the opposite, It’s all about “fairness”, or, more bluntly, total meritocracy,
Web3 is about the commoditisation of the commons, and the pricing of everything (even that which we hold to be invaluable – love, future life, and yes, even souls.
Forget freemium. Where we’re headed, everything is pay to play. Value can be tracked, traced and traded on a micro scale, so it is and will be tracked, traced and traded on an ever more granular basis. The free (or at least market-subsidised) lunches are over, and the pay as you go (or buy now but pay later, if you want to get technical) “creator economy” is here. This means, you get priced. Your intrinsic (social “credit” or contribution or society) and extrinsic (cash credit, or bank balance) value and contribution is fully priced and accounted for. No freeloaders welcome in defi!
“Unto each according to his credit…”
(Remember, in defi, all data is credit data! Your reputation is your currency!)
But, it is worth pondering the merits of, well meritocracy and its close ally, capitalism in this brave new world. Both capitalism and meritocracy have served to be efficient (if not exactly “fair”, depending on your definition thereof) allocators of definitively scarce real resources. However, when capitalism and meritocracy are used to create and (re)distribute artificial scarcity, and natural abundance, achieved by erecting and digitally tolling unnecessary moats that limit the sharing of infinitely replicable digital goods and services, the prices of which would otherwise tend to zero as the “prosperity futurists of the “web 2” naughties promised”, we should not be surprised if “capitalism” becomes even less popular than it already is.
This article was originally published *(with a few edits) in Brainstorm magazine.