Socialism. Capitalism. Communism.
We all heard the "isms" and the debates about them. For the last couple centuries, people tried to figure out a way to establish a "better system". This started by viewing the weaknesses of one system, then developing something that addressed them. The challenge is a host of other problems arose along with the tendency for humans to be, well, humans.
While the flaws in each model exists, it is safe to say that capitalism had the greatest overall impact in a positive direction. This might be simply a case that it was the most popular over the last 150 years. Either way, we saw radical advancement throughout with hundreds of millions being lifted out of poverty.
Nevertheless, there is a serious flaw with capitalism, something proponents are not quick to admit.
Source
The End Of Capitalism?
What is the end game with capitalism? This is something few think about. Yet, it is worthy of question since we are most likely approaching it.
We see an inherent problem with the capitalistic model and it is not what people typically point to. Simply put, it is a simple question of mathematics.
It all stems from the return-on capital. This, over the long term, creates major problems for which, there is only one solution. Of course, it is not what people typically think, i.e. socialism or something of that nature. We will cover that in the next section.
The best way to describe this is to use an example.
Let us suppose that we have two individuals. Here is the starting capital they have:
Person A: $100,000
Person B: $10 million
Each gets a 5% return:
Person A: $5,000
Person B: $500,000
As we can see, the raw numbers are much different. It is an equitable return since both get 5%. However, the capital amount causes a major problem.
After the first year, excluding taxes and spending, we see this:
Person A: $105,000
Person B: $10,500,000
On a relative scale, even though both received the same rate of return, Person A actually lost ground to Person B. The gap between both is getting wider even with the same rate of return.
Hence, the rich get richer.
To close the gap, Person A would need to get a massive outsized return (50% or greater) to offset the sheer numerical difference the other has.
If we spread this across an entire economy, we can see how the system does not compensate for this. Of course, this is where redistribution models are proposed, none of which work outside the theoretical realm.
That is another problem that enter. Due to the exclusionary nature of the system, Person B is not relegated to the same return as Person A. In fact, the former has access to returns that later cannot participate in. Many countries as some form of "Accredited Investor Status" which means that only those with a high net worth are allowed to participate in certain investments. Typically, this means Person B will have access far earlier than Person A. Thus, instead of 5%, this allows for 15%, 20%, or even greater returns.
Obviously, this only increase the gap on a relative scale.
Historic Redistribution
There is only one thing that alleviates this situation. It is something that happened twice before on a large scale and might be taking place again.
We see inherent challenges with socialism and communism. The biggest obstacle is there is still a centralized group who is "in charge". Thus, economic growth and profitability tend to take a back seat to other decisions. This is why countries under that system always fall behind.
China is an example of one that fell victim to this. Its GDP exploded over the last few decades but that is a gross measurement. The net tells a different story. The country is still dealing with this situation now as exemplified by Evergrande where the decisions are to keep the population from revolting, not necessarily the best from an economic standpoint.
So how does this situation get resolved? In the past, we saw the nature of wealth changed. That is truly the only path where the distribution of wealth is radically altered.
A few hundred years ago, wealth came in the form of land. The richest people in the world were those who held the most land, primarily in Europe. This is what determined status and who was in control of the economy. European landowners were some of the richest people in history.
How did they lose their status along with their fortunes? It was not through anything they did.
Instead, we saw something a couple hundred years ago that was basically an economic paradigm shift. The introduction of industrialism created a new class of wealthy, far surpassing that of the old guard. This new system meant that massive wealth could be generated on rather small parcels of land. Suddenly names like Ford, Rockefeller, Vanderbilt, and Carnegie were the ones who occupied the upper rungs of wealth.
For the most part, this continued through present day. While we moved to a digital world, the likes of Bezos and Musk are not much different from Ford or Rockefeller. They simply are our modern day industrialists, excelling in a very similar system.
The question is are we embarking upon another economic paradigm shift, one that moves us away from the "isms" we know?
Community-ism
Most of us are aware that tokenization is taking place on a fairly large scale. This already generated enormous fortunes for many and we are still in the very early stages.
There is little doubt that Bitcoin was a massive transformation. In a little over a decade, it created many millionaires and a few billionaires. It spawned an entire industry that is already worth trillions and will keep growing. Many are expecting the total wealth to enter the hundreds of trillions, perhaps even quadrillions of dollars.
We see a lot of discussion about Web 3.0 and how it is going to change the Internet. What we are really talking about is a new economic model. This is not truly capitalistic nor is it socialist. Certainly, there are characteristics of each yet it is something completely different.
Ultimately, this system is based around the concept of community. It is the assembling of people around a particular area of interest that serves as the foundation of this entire model. Those individuals can tokenize that community, giving them the opportunity to form their own economy.
Suddenly, Network Effect becomes a major variable in the amount of wealth that is generated. This is not exactly novel since the largest companies in the world today, mega-tech, learned this secret years ago. The challenge is that the Google Boys and Mark Zuckerberg operated under the old system. They, too, are not much different from the industrialists of yesteryear.
We still see the same concentration of wealth (if not more so). However, under Community-ism we see the possibility of another paradigm shift taking place. This one is inclusive, spreading the wealth out even further. Since any community can tokenize, the value generated among those individuals involved is also retained by them. They have the ability to financial benefit from their activities.
The key is the speed which this is happening. If we consider how long it took us to immerse ourselves in the industrial age, we see how it was many decades before things took hold.
With cryptocurrency it is much different. Even though Bitcoin came about 12 years ago, smart contract capability is only 6 years old. Going even further, most of the development really only took place in the last few years.
In other words, we are growing at a rapid rate, providing the likelihood that this will be a radically different system in two decades. This is going to spread to every industry.
Tokenization changes the entire ownership model. This also enables a completely new funding mechanism to be instilled. Ultimately, we could see transition in what denotes wealth. The old asset classes, such as stock ownership in a Facebook or Google, could be wiped out. Naturally, there will be some things that still have value, just like European land did not instantly become worthless.
However, the massive amount of growth will not come from the traditional system. Community-ism has the potential to generate the funding that will take development to a much higher level. This, coupled with the new state of ownership, will change the entire economic foundation of our planet.
Within a decade, most of the global population might be operating under a completely new business model. Those who try to hold onto their old system of wealth could find themselves falling behind on a relative basis.
The outsized returns of this new paradigm will not only close the gap, it will likely power many within this industry to the top of the wealth charts.
If you found this article informative, please give an upvote and rehive.
gif by @doze
logo by @st8z
Posted Using LeoFinance Beta
Just like the other system, community-ism will bring abundance to a new class of folks around the world. Somehow more will benefit from it while there will be people with $2 a day and corruption, poverty.
This is how humans treat other humans.
Great post for everyone to think where we are
in this world.
Posted Using LeoFinance Beta
Very interesting! That is a really good example of how the wealth gap just keeps increasing more and more. I have to say at least on some level, I still see similar things happening on the crypto side. The people with more money are able to go in bigger on opportunities and it just continues to increase their wealth. I am in an NFT group right now where it is just crazy the amount of money people have to throw into different projects. In some circles I would probably be considered a big fish, but with them I am just a minnow. I think the main difference is the fact that there are just more opportunities. Whether you can invest as much as someone else or not.
Posted Using LeoFinance Beta
Well the wealth gap will probably still exist but it may get smaller under a new model. Then again if taxes and regulations don't change, I still can't find a way the gap decreases. After all, the wealthy and powerful still have access to the best lawyers and accountants. By doing so, they will still take advantage of the loopholes.
Posted Using LeoFinance Beta
It will although it will be in a different realm. And if people have the ability to generate wealth through their activities and have actual ownership, then we are discussing something completely different.
Posted Using LeoFinance Beta
It's quite suprising, how feudalism was a huge land ownership means that made people wealthy. If you ask me, the advent of technology or the passage of time has quite shown that one don't need size to show the degree of wealth. Billionaires like Zuckerberg control virtual spaces with their online activities and this makes them real-time wealth. In Nigeria back then people stored money in sacks and silos and the depth of these siloes showed or proved how wealthy the were.
How things and time have changed.
These systems are perfect because I believe it's as a result of the human factor.
Posted Using LeoFinance Beta
Human focus is certainly part of the equation. If that is not taken into account, we will simply keep recreating the same model.
Posted Using LeoFinance Beta
What do people think the "Communi" in Communism stands for?
Can't call it communism because people are so brainwashed against that word.
Posted Using LeoFinance Beta
Well for good reason. Communism resulted in the largest inequalities the world ever say. It only served to make the masses a lot poorer.
Look at how Russia is still reeling from 70 years of communism.
Posted Using LeoFinance Beta
I guess I just take issue with calling authoritarianism, fascism, and totalitarianism: communism.
Those governments were closer to Monarchy than anything else.
Complete centralized control.
Not to mention no one can really meet in the middle on how to do it correctly. Whenever it fails, people just say it wasn't done correctly.
This short story lends itself to the blockchain very easily.
Though, this one might be just as good.
The former has obligations as currency, and the second predates credit cards by 100 years, or so.
Both describe how life could be without dollars, per se.
When we go back to measuring reputations by work product, rather than cash, we might get back on track.
I will check both those articles out. Thanks for the lead.
Posted Using LeoFinance Beta
You kind of skipped over the Bank of England's creation that lead to Countries taxing their citizens just to pay these Loan sharks back in the 1600s. Kinda lead to America being founded. But look no further than Rockefellers and their Centuries old relationship with the Rothschilds, who created the whole global central banking system, to highlight how their sharky ways allowed for them to control large portions of Americas government, land, resources and even money printing.
I would argue compound interest and those who control that mechanism is the reason the common land owner lost his land and still is. Well yeah now and days the Government will just take your land and have the irs seize whatever compound interest or not. So there is also that.
https://humansarefree.com/2013/11/case-closed-jfk-killed-after-shutting-down-rothschilds-federal-reserve.html
People seem to think the banker influence is something new. As you point out, it goes back centuries.
Posted Using LeoFinance Beta
Well, it does provide major credence to your post just gotta adjust the timeline a little bit. In the grand scheme of things the international banking system is new. Land ownership for many more centuries was and still is in many ways the true source of an individual's power, not man made laws and perks from being a yes man in a debt based society.
Your posts do a great job in luring the reader in. Thanks for the post!
View or trade
BEER.Hey @taskmaster4450, here is a little bit of
BEERfrom @pixresteemer for you. Enjoy it!Learn how to earn FREE BEER each day by staking your
BEER.While I believe your view of the future is, as usual, reasonably accurate, I have to disagree about some of the fundamental (theoretical) causes underlying your arguments here. For starters Capitalism at its most basic level is about one thing; Property Rights. That is to say the right of ownership in an asset/property and to control its usage. In America this is set forth in legal terms according to ch. 5 of John Locke’s “Second Treatise on Government”.
As to the causal source for the many iniquities we seen in capitalistic systems today, and I cannot argue that they don’t exist, I would say that it is not a fundamental flaw in the system but rather a failure in the fundamental ethical guidance governing the application and practice of the system. As Locke pointed out at the end of that chapter in his book we have an ethical (he said moral which is a philosophical mistake) obligation to take only what we need from a property and no more. This has always been the one point of property right that has always been ignored.
It is also worth noting that who controls property right is the critical distinction between capitalist and socialist systems. In the former it is the individual in the latter it is the state and in that case people (as the most basic means of production) are also property of the state (and that is slavery!).
One of my key arguments is that we make a critical mistake in regards to the concept of success. The most common practice is to think of personal, business and community success as distinctly separate things. The mistake is that they are dynamically interlinked but we so often fail to recognize this. To put it simply the dynamic has two possible states, Symbiotic or Parasitic. If anything whatsoever is parasitic in the pursuit of success within the sphere of any one of the three core elements, individual, economic enterprise or community, then the whole dynamic follows suit and must inevitably lead to a catastrophic collapse. And it is sound, logical and definitive ethical principles which determine the state of the dynamic.
I really love the title you chose for this post. Community-ism is such a perfect description for our current state of affairs. I think it all comes down to a choice each of us has to make regarding self-interest. Do we take the “me first” stance of self-serving self-interest or a communally focused position that acknowledges “my best interests are derived from the satisfaction of the needs of my community”.
The first position can only lead to a parasitic success dynamic while the second promotes a symbiotic one. This is not an altruistic stance but rather one in which the individual, economic enterprise and community benefit in a proportional manner Also this view of success allows for each individual to define success on their own terms without regard to anyone elses definition or expectations. Not everyone is naturally geared to the accumulation of wealth, at least not to the same degree.
I suspect that as we move forward we will discover, as you so often point out, that the crypto metaverse will do a great deal to balance out much of the iniquity in income/standard of living and free massive segments of the global population from the worst impacts of negative human nature (there are both negative and positive aspects in all of us). This means we will eventually see a decline in tyranny, oppression and even economic exclusion. What I do not believe we will ever see is everyone becoming massively wealthy because everyone's needs are different and every individual will define success in different ways. Having said that I believe there is hope for the future and crypto will definitely change things.
Blessed be.
Wow. The comments in here. Your take is pretty informative. Tokenization is also an interesting perspective, but I wonder how decentralization fits in. I think HOA's are a good experiment here. What would happen if we introduce tokenization and decentralize an HOA. What becomes of it.
It's a simple example, but one of the unfair comparisons of using an HOA is that HOA's are closed and don't have to deal with expansion. I think it's a start though. No one likes HOA's.
I am not sure HOAs can be solved by tokenization.
My experience is that you get too many Dudley Do As I Say people involved with them and it ends up as a tyrannical regime.
Most just want to be left alone whereas the power hungry people use that to exert control. If tokenized, they just might buy up all the stake.
Posted Using LeoFinance Beta
That's a fair point. There's a corruption and there's tyranny. Solving one problem does not inherently solve another.