The future that got stolen from us
Once upon a time, society saw technological progress as the way to free people from 9-to-5 jobs. Where did that dream go?
Once upon a time, society saw technological progress as the way to free people from 9-to-5 jobs. Where did that dream go?
Creativity sets humans apart from other species. We can build tools like no other animal species can. The first tools were just shaped rocks. Now, those tools have gotten more advanced and we call them technology. In short, creativity is the trait that allows humans to transcend biological evolution — it's an evolutionary shortcut.
If creativity is what we are good at, why are most people on Earth working on non-creative jobs? When I mean creative jobs, I don't mean just art. Programming is creative, architecture is creative, science is creative. But most jobs today don't shine for their creativity.
In COVID times, some stores have to obey with certain maximum capacity restrictions. I have witnessed how some of those firms have hired people to hold a counter in their hand and click each time a new customer comes in.
With the advancements in machine learning technology, installing a cheap camera and equipping it with some open source software would suffice. Having a human do such a task in today's world is almost an insult to nature, who has created the beautiful miracle that humankind is.
It's like using a supersonic plane to drive on a patchy road — maybe it would be better to fly it?
But here comes the paradox — most people today want those kinds of jobs. Because in most cases the alternative is unemployment, and not being able to pay the bills.
How have we ended up in such a paradox? With such technological progress, why do humans need to resort to non-creative jobs that they don't enjoy?
Technology inherently increases inequality
Technological advancements are akin to sophisticated tools. Having an arrow or a sharp stone meant that our ancestors could hunt more efficiently than those without tools.
The same applies to our world, except the gap has widened. Imagine someone who doesn't use modern technology at all — phone, Internet, etc. Can they even live in today's society? Increasingly, the answer is no. Fortunately, most people can learn how to use a smartphone or the Internet.
But there's a catch — as the pace of technology increases, the learning curve becomes steeper.
Of course, that's when specialization and division of labor kicks in — so each person can focus on a field of expertise. But because of technology itself, that field of expertise might quickly change, or even become obsolete. Quickly, most jobs become automated. In the coming decades, people might need to become specialized in different jobs at different points in time. Thus, the standard path from academic education to work (school → college → work) is rendered obsolete as well.
As traditional education has stagnated around the old model, those who are avid self-learners have an evolutionary advantage in this world. They can actively keep up to the latest technology to not fall into the inequality gap.
Economic upside from technology is not widely distributed
Money is an information system for resource allocation. Money helps society direct attention towards producing services and goods that are demanded. But demanded by who? Of course, those with capital.
Most services and goods are still provided or produced by humans in some way, so money becomes an allocation system for human labor. The more capital you have, the more you can demand. How do you achieve freedom in such a system? By having the capital required to purchase all your time.
To put it in a different way, when we are born, the default state is that we will need to work for others in order to sustain ourselves. Working for others doesn't mean employment — even if you are an entrepreneur, you are still working to produce something society wants, therefore working for others.
In today's world, financial freedom is restricted to few and a utopian dream to most.
But wait, didn't we have all these movies about how robots would work so we can chill? If we have the robots already, why cannot we chill?
Well, the robots are there, but they are not working for you. They are working for shareholders.
Companies operating in free markets have brought immense technological progress.
Unfortunately, that progress hasn't been widely distributed. Sure, we can argue that tech companies employ people. But in fact, the core value proposition of a tech company is to achieve hyper-growth by automating processes.
So what's the solution? Should we expropriate companies, take all that money from billionaires and distribute it to all citizens? Sure, that would reduce the inequality gap. But it would also destroy technological progress — since entrepreneurs wouldn't be economically incentivized anymore.
Technology as a common good
I have been a free software enthusiast since the age of 12. I just believed that there are things that everyone should have equal access to, no matter their wealth or location. Otherwise, the inequality gap would only grow wider.
But wait, open source has succeded, right? Every tech company uses open source to power their stack, that's right. Yeah, they use it to power their stack. The entire stack is not open source — the value happens up the stack, in the distribution. Take Amazon. Their open source frontend libraries don't accrue much value. The value accrues in the distribution, in the platform and its network effects.
We need open source stacks. The whole platform, the whole network needs to be open source. This is the vision behind Web3 — open networks which are fully open source.
These open networks resemble a mixture between a company and a common good. The networks have built-in market incentives to remain competitive and capture value, while their ownership is widely distributed among stakeholders.
Bitcoin is the first asset that has achieved such a sweet spot, which is quickly elevating it as the world's store of value. But the same needs to happen to most tech companies — fully open source, community-governed stacks need to replace proprietary software, distribution channels and cap tables.
Economic upside from nation states is not distributed, at all
When we think about common goods, we usually think about first-world nation states and the basic services they provide — like free healthcare to all.
Unfortunately, those services aren't enough for people to achieve financial freedom. Not only they aren't enough, but nation states have become extractive entities that actively stop citizens from achieving such freedom.
Nation states collect taxes, and in exchange they allow their citizens to create wealth within their borders. Essentially, people pay for creating wealth. Isn't that backwards? Shouldn't the nation state pay people in exchange for them creating wealth within their land and increasing its value?
The obvious problem here is that nation states are monopolies. The switching costs resulting from moving nations are very high, thus nation states can pretty much do whatever they want. Fortunately, as remote work becomes the norm, jurisdictional competition will kick in and nation states will have to compete for talent. Some nation states are already offering tax breaks for talented individuals moving in and creating wealth within their borders.
But coming back to financial freedom for the average citizen, does any of this matter? Even if a nation state is smart enough to attract great talent, how does it benefit the average citizen?
For example, if many talented and wealthy people move countries, they will create jobs and purchase real estate. So, home owners can profit and citizens can access more jobs. Okay, but... in a world in which owning a house equals to being rich already, this doesn't benefit the average citizen. What about a job? Well, they are great, but they will rarely get citizens to financial freedom.
Then what's the issue? Citizens don't really own a stake in their nation states. Even if a nation state is doing great, they will only benefit by proxy — by having better services like healthcare. But those services won't buy them food or a house. It's like employment, they are great but they won't move the needle towards financial freedom.
Enter Web3 protocols and DAOs
Wonder why the inequality gap is widening?
On one hand we have corporations who concentrate wealth in the hands of few.
On the other hand we have nation states that fail to distribute wealth into the hands of many.
Corporations do a great job incentivizing founders, investors and employees towards wealth creation. But those same incentives and exclusive distribution make them unsuitable to maintain common goods.
Nation states do a relatively good job maintaining common goods for all their citizens. But they do a very poor job when it comes to producing and accruing wealth for their citizens.
The perfect mixture for both models is what we know as DAOs — which are open communities with built-in economic incentives and where ownership is widely distributed.
DAOs have the potential to create new ownership models with wide distribution and powerful cryptoeconomic incentives. DAOs are still definitely early but experimentation is going strong, with almost $1 billion governed by them at the time of writing — not a huge number, but it was more than 100x less just a year ago.
The future I hope to see
My hope is that experimentation in DAOs will get us to models where large amounts of people will benefit from technological progress, to the point in which they achieve financial freedom or at least UBI.
Bitcoin has been the most groundbreaking technological revolution of the century. Everyone who wanted to participate, had a tiny amount of capital and a big amount of conviction could join. Bitcoin has produced a massive amount of wealth for many. We can always see the glass half-empty and try to argue that Bitcoin has benefitted already wealthy people, but that's not even the point. The point is that Bitcoin is way more inclusive than the alternative.
I'm sure the next decentralized Facebook won't be perfect, but I'm sure its token will have a wider and more inclusive distribution than $FB.
Web3 protocols blur the line between producers and consumers. $FB is owned by founders, employees and investors. A decentralized Facebook will give away stake to its users from day one.
Now imagine a world where all Web2 companies that have generated hundreds of billions of wealth get disrupted by Web3 alternatives — partly, owned by their users.
We quickly get into a world in which users become first-world citizens in the journey of tech wealth creation.
I started writing this blog post by asking one simple question:
Once upon a time, society saw technological progress as the way to free people from 9-to-5 jobs. Where did that dream go?
I have been asking myself that question for years and years. And when I started writing, I didn't know what my answer would be. I analyzed the problem and dove deeper and deeper. It turns out, the answer was closer to me than I thought: we need new governance and ownership structures — DAOs.