<<< This post was inspired by the ongoing debates in the Will ADA Whales Ever Give Up Their Power? and What is Cardano’s Purpose? threads. Before jumping to any conclusions about this thread, please make sure you’re familiar with at least the first posts in those other threads to place this thread into proper context. If you don’t like reading, please, just ignore this post because it covers a lot of deep and potentially controversial topics that require substantial time and effort to appreciate. Many other people (including me) enjoy reading other people’s thoughtful ideas and suggestions and we don’t need to see a bunch of unnecessary negative comments and false accusations that don’t add any meaningful value to the discussion.>>>
Purpose of this Thread: Develop a meaningful understanding of the fundamental source of our ongoing debate. Since we all have a lot at stake, this is an important conversation. First, a couple brief foundational concepts. . . .
We Are All Trapped in a Tiny Perceptual Bubble. One of the most challenging aspects of building anything on a large scale is distinguishing between perception vs. reality. It’s difficult because, for the human brain, perception is reality. But human perception is not objective reality because every human brain is trapped in a tiny bubble. There are many fundamental reasons for this in physics, quantum physics, biology, ontology, metaphysics, spirituality, etc., all of which are beyond the scope of this post. However, at the level of human communities, the size of our perceptual bubble is determined by each person’s age, education, culture, birth era, and life experience.
The Bubbles of Children vs. Adults. We see this perceptual bubble phenomenon most dramatically when we compare the reasoning capacity of a child to an adult. In addition to obvious biological factors, the perceptual contrast between a child and an adult exists because the perceptual bubble of a child’s brain is significantly smaller than the perceptual bubble of an adult’s brain. Regardless, we are all trapped in a bubble; so, the key questions are: Do we recognize our bubbles and do we make a sincere effort to expand our bubbles? (BTW, I’m not calling anybody in this community “children.” So nobody needs to distort my words and jump to any more false accusations like they did in the other threads.)
Now on to the more specific socioeconomic and Cardano stuff. . . .
Is Unlimited Profit/Control for a Lucky Few a Higher Priority than a Sustainable Ecosystem? This question is the essence of the debate in the Will ADA Whales Ever Give Up Their Power? and What is Cardano’s Purpose? threads. Based on the overall feedback so far, there seems to be substantial community consensus on this issue: Sustainability is more important than unlimited profits/control for a few. (I said “community consensus,” not “whale consensus.” Obviously, the whales probably have a different perception at this moment.) Achieving community consensus is important, and generally it’s all that is necessary for a community to remain together within a truly democratic system. (Of course, we know now that Cardano will never be truly democratic based on the current ADA distribution, but let’s ignore that reality for a moment to stay focused on why we’re having this debate in the first place.)
Politics vs. Economics Is a False Dichotomy: The Birth of Political Economy. Succinctly, politics is the study of power/influence. Economics is the study of how scarce resources and value are distributed throughout a society, but the distribution decisions are based on human governments and laws that are controlled by human power/influence. Thus, economics and politics are inseparable. This is why the field of “Political Economy” was the original field that Adam Smith founded when he published his book, The Wealth of Nations, in 1776. In fact, classical liberals like Adam Smith, J.S. Mill, Locke, Hobbes, Montesquieu, and all the U.S. Founding Fathers never believed economics could be legitimately separated from politics. This is why “Political Economy” was the label generally used to describe all economic activity until 1890.
Politics vs. Economics Is a False Dichotomy: The Birth of Economics. The field of pure “Economics” came much later in the 19th Century when Alfred Marshall published his 1890 academic textbook, Principles of Economics. He published that textbook in response to corporations and politicians who wanted to start developing academic theories and models to justify the profit motives of corporations and nations (in particular, U.S. corporations and the USG). By design, all academic economic models and theories (including Mises’ “Theory of Money and Credit” and Keynes’ “General Theory of Employment, Interest and Money”) explicitly and structurally ignore the complexities of politics and human nature. This fundamentally distorts their models and all conclusions derived from their models.
Separating Economics from Politics Creates Many Socioeconomic Problems. The artificial and arbitrary separation between Economics and Politics was inconceivable to classical liberals like Adam Smith because they knew that they’re simply two sides of the same coin: There is no free-market economy without meaningful democratic governance, and there is no meaningful democratic governance without a sustainable economy that distributes value equitably throughout a society. (I did not say “equally.” There’s a huge difference.) Classical liberals understood that trying to separate economics from politics is like trying to separate hydrogen and oxygen atoms in H2O: It’s no longer life-giving water if you separate their components. So, why is this important? Because this artificial separation leads to many problems when governments, societies, and blockchain projects try to build equitable and sustainable economic systems based on Mises’ and/or Keynes’ academic theories.
Ideology vs. Reality. Another reason it’s very difficult to accomplish anything on a large scale is because many humans confuse ideology with reality, which often spawns a tribe mentality. In this context, the tribe mentally occurs because many people get confused and frustrated when they assume economics and politics are separate domains and/or they get overwhelmed by all the noise and propaganda from special interest groups and governments. When humans are confused/frustrated/overwhelmed, their emotions get triggered, which creates fears and insecurities, which creates an impulse to seek safety with a familiar tribe (Keynesians, Austrians, Marxists, Democrats, Republicans, Liberals, Conservatives, etc.). But the safety of their tribe is just a regression back into their comfortable bubble and a missed opportunity to expand their perception of reality, i.e., a missed opportunity to expand their bubble.
All Economic Ideologies Are on the Same Continuum of Political Economy. We see the tribe mentality constantly when people argue over capitalism vs. communism, democracy vs. authoritarianism, free markets vs. coordinated markets, purely free trade vs. import substitution industrialization (ISI), supply vs. demand, etc. They don’t understand that all these concepts are merely different points along the same continuum of Political Economy. Where a society, community, or country exists along that continuum depends on how their citizens/stakeholders prioritize ecosystem sustainability vs. unlimited power/profit for a few.
Maximizing Profit is Not Equal to Maximizing Human Welfare. A huge false assumption that virtually all mainstream/neoliberal economists have made since the late 1970s is that GDP is all that really matters. They claim that as long as a country’s GDP is growing, then all the wealth will magically “trickle down” to the masses and there will be “more winners than losers.” A few people in this community believe the same is true about the ADA economy: They claim that all the whale wealth will trickle down to the ADA masses when the whales start selling their ADA. There is no evidence that this process will ever lead to any meaningful decentralization of wealth/power throughout any economy (fiat or crypto). In fact, the evidence shows the exact opposite.
Increasing Gini Indexes & Stagnant Middle-Class Incomes Prove Trickle-Down Economics Is BS. Aggregate economic metrics like GDP (or ADA market cap) reveal nothing about how wealth/power is distributed throughout a society; and the distribution of wealth/power in every society is what determines the systemic health of every economy, including our ADA economy. This is why measuring the Gini Index and median income (not per-capita income) is so important. Measuring those factors, we can see that high Gini Indexes and completely flat and declining real income of the middle classes in nearly all rich countries today (while their GDP’s have exploded) proves that trickle-down economics is a fantasy. Yet, virtually all mainstream fiat/crypto economic theories and models are built on this fantasy today. Predictably, these are the same theories/models/fantasies that have transformed our global economy into the debt-choked, unstable, unsustainable, oligarchic, conflict-ridden system of corporate greed and injustice that it is today. Is this what we want for the ADA economy?
Pure Free Markets Are a Fantasy. Anybody who has ever been a lobbyist, politician, or senior corporate executive operating in a global market knows that pure free markets are a fantasy. Purely free markets only exist in the fantasies of Austrian School academics and Ayn Rand disciples, which included me when I was younger. Their free-market theories and models completely ignore real-world geopolitics and fallible human nature. They ignore the fact that there will always be government intervention (both in fiat economies and crypto economies) because all human-controlled systems tend to concentrate unsustainable wealth and power toward the class with the most political power (whales, oligarchs, politburo commissars, titans of industry, despots, etc.) unless there are even more powerful counter-balancing systemic forces and effective checks-and-balances engineered into the system to prevent the wealth/power of any particular special interest group from concentrating and overwhelming the decision-making processes of the system.
If Government Intervention is Inevitable, How Should Governments Intervene? Given that human governments will always intervene to skew the distribution of a society’s wealth toward the most politically connected creatures, the primary real-world question that we should ask is this: Will fiat/crypto governments intervene to amplify the economies of scale of the whales (e.g., transnational corporations in the fiat world and ADA whales here) or will fiat/crypto governments intervene to create ecosystem balance so that small- to medium-sized companies and the middle class can achieve a sustainable level of wealth and influence within the ecosystem? Notice I never said “equalize everybody”; so, anybody who accuses me of that nonsense from this point forward should be regarded as a bona fide ideologue (aka, a moronic zombie).
Unbridled Capitalism Is Not Equal to Human Liberty. Many Ayn Rand lovers (including me when I was younger) believe that true freedom comes from pure free markets. After many years of traveling and studying different economies, talking with political leaders in different countries, operating companies in different economic systems, dealing with corrupt tax and regulatory regimes that are engineered to benefit the largest transnational corporations . . . I realized that unbridled capitalism is not the same as human liberty. In fact, contrary to Ayn Rand’s and Hayek’s extremely narrow view of Political Economy, unbridled capitalism quickly destroys human liberty because every economy is inevitably distorted by government intervention, which always creates a systemic bias toward the most politically well-connected business groups in a society unless strong counter-balancing mechanisms are engineered into the system. (The Hayek/Rand/Libertarian pure free-market fantasy of an economy with no government intervention, which they believe would magically cure this vicious cycle, is a non-existent choice in the real world.)
Investor Capital Is Only One Form of Value. The dynamics above inevitably cause the wealth of a fiat/crypto economy to flow to the most politically connected group based on inherited aristocracy, luck of birth time/place, private voucher sale invitations, and many factors that have nothing to do with merit or the actual value they contribute to society. This is exactly what we already have in our ADA economy today with respect to the anonymous whales (it doesn’t have to be this way, see here), which is a huge problem because investor “capital” is only one of many forms of value that a society/economy should recognize and reward. But our ADA economy is already essentially being built on the same economic ideology that is destroying the global fiat economy. So, as a community, IMHO, we should lobby very hard to create numerous and specific structural mechanisms at the protocol level to diffuse the early staking wealth/power throughout the ADA economy based on many more factors than early investor/founder ADA (e.g., the Founder’s Stake ideas we discussed here).
Economic Freedom Is Not Equal to Business Freedom. Confusing business freedom with economic freedom inevitably destroys the economic and political freedom of the masses while it protects the business freedom of the oligarchic few. Then the oligarchs use their wealth/power generated from their business freedom to skew the distribution of wealth throughout the entire society back to themselves, which empowers them further to purchase biased politicians and laws that enable them to perpetuate their business and economic wealth/power over generations. Contrary to Ayn Rand’s fictional books that have no basis in economic reality, giving whales (transnational corporations or ADA whales here) the freedom to trample all over an economy is not “economic freedom”; that is “business/capital freedom”, which protects the business freedom of a few oligarchs while sacrificing the economic and political freedom of everybody else.
The Sad History of Wealth/Power Concentration. Everything I’ve posted over the past few days is obvious to anybody who has ever studied the economic history of the Gilded Age in the United States; the concentration of wealth/power in Nazi Germany and pre-WWII Italy; pre-Soviet tsarist Russia and post-soviet oligarchic Russia today; the despotic power in the GCC states since they discovered oil and natural gas; the long and sad history of economic oppression in virtually every Latin American and African country; the rapid concentration of wealth/power in China, which is more capitalistic than the U.S. now . . . and drumroll . . . the obscene concentration of wealth/power in the United States today, which has destroyed the U.S. economy and political system, which is pushing the world into an economic depression that will dwarf the Great Depression. Is this what we want for the ADA economy?
The Neurotoxin of Neoliberalism. No matter what we discuss and how much logic and evidence we present, some people probably won’t be able to escape their bubble and they will continue believing that ecosystem balance is tantamount to communism. I understand this because I felt the same way for years as a young libertarian. But I realized that this feeling does not occur naturally; it must be injected into us like a neurotoxin from corporate propaganda and a debased culture. In fact, this feeling was virtually nonexistent on Earth until the 1980s when the neoliberal trinity of Ayn Rand, Friedrich Hayek, and Milton Friedman were selected by Ronald Reagan and Margaret Thatcher to provide the economic ideology for their respective economic policies. Reagan/Thatcher did that because that’s what their corporate supporters wanted and because they truly believed in neoliberal economic theories.
The God of Shareholder Value is Born. The god of “shareholder value” was born from the marriage of neoliberal economics and the “greed is good” culture that it spawned on Wall Street in the 1980s. I have worked on Wall Street and in several other global banking centers for many years; so, I have direct experience with the “greed is good” culture. In fact, I’ve watched how corporate interests, led by Wall Street, have systematically exploited the idealism of Ayn Rand, Hayek, and libertarians in general to transform Libertarianism into the trojan horse of economically exploitative neoliberalism. Then neoliberalism itself has been exploited by governments as a vehicle of global economic imperialism. Before the 1980s, the idea that “shareholder value” trumps human welfare was a laughable abomination of rational corporate governance, trade, and labor policies.
Ideological Bubbles. Everybody, including me, is trapped in a bubble, but not everybody cares or has the desire to expand their bubble. I recognized that I was living in a Libertarian/neoliberal bubble after reading Ayn Rand, Mises, Friedrich Hayek (and the Austrian School in general), Milton Friedman, Murray Rothbard, Frederic Bastiat, etc. during the first half of my life. Many young people with a desire to understand economics gravitate to those authors because those authors tell us what we want to hear: “Government, leave me and our markets alone!” But without understanding the historical context in which all those authors were writing, and without understanding the true nature of Political Economy and how all economic markets are political creations, we are simply reinforcing our preexisting ideological bubbles, which are fabricated out of preexisting beliefs, which are amplified by subconscious emotions and tribal behavior.
Ideological Bubbles Lead to Conflict & War. Ideological bubbles are perceptual prisons of our own making. They prevent us from understanding other people, which prevents us from developing empathy. When humans lack empathy, they lack the ability to see the world from other perspectives, which prevents them from having meaningful conversations. When communication breaks down, animal instincts are triggered and humans resort to aggression and violence, which is why Clausewitz said, “War is politics by other means.” Thus, communication breakdowns are part of a vicious cycle of self-imposed perceptual bubbles, ideological rigidity, deficits of empathy, inter-personal blindness, communication breakdowns, conflict, war, self-imposed perceptual bubbles . . . ad infinitum.
How to Escape Ideological Bubbles? If we understand that ideological bubbles are created by perceptual bubbles, and perceptual bubbles are created because we are all trapped in a specific time, place, age, level of education, life experience, and culture, then we can rationally conclude that expanding our perceptual bubble is the only way to escape an ideological bubble. So how do we expand our perceptual bubble? The same way children expand their perceptual bubble: Constant learning and constant exposure to new ideas that challenge us to think beyond the prison of our existing bubble.
Our Political Economy Education. Reading a couple Ayn Rand books, Hayek’s Road to Serfdom, and a few articles at the Mises Institute website does not constitute a complete education in Political Economy. The world of Political Economy expands far beyond the tiny bubbles of Ayn Rand and Austrian School economics, which is why no serious economist has ever taken Ayn Rand seriously and nobody took Hayek seriously until Reagan/Thatcher gave him a corporate-funded platform in the late 1970s. (Ayn Rand knew very little about economics—she simply hated communism and cherry-picked ideas from Mises to make her books seem substantive.) And I’m not saying Hayek is wrong on everything (although my posts are primarily a response to the Rand/Hayek cheerleaders that have attacked me); I’m saying that the Austrian and the Keynesian Schools make many unrealistic assumptions in their theories and models, which leads to many problems when policymakers try to translate their academic theories into real-world socioeconomic policies.
We Should Not Be Slaves to Dead Economists. For all the reasons above and many more, IMHO, we should make our decisions based on our community’s primary purpose and our highest priorities, which is why I wrote the whale and Cardano purpose posts. We should not be slaves to dead economists who never imagined how artificial intelligence, robots, IoT, and incomprehensible concentrations of wealth/power would converge to create the deeply inequitable and unjust world that neoliberalism and the “god of shareholder value” have delivered to us today. “Practical men who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist.” – J.M. Keynes (At least Keynes had enough humility and humor to not take himself too seriously. Here’s a hilarious video that illustrates this point.)
A.I. Will Amplify All the Problems We Have Today. A.I. is already amplifying the economic imbalances in all fiat economies and it will do the same thing in the ADA economy if very specific counter-balancing mechanisms are not implemented to gradually resist the economies of scale that occur in virtually every economic system. Perpetual economies of scale do not result in sustainable outcomes. In fact, the 10 largest corporations on Earth today already control more fiat-denominated economic resources than 92% of all countries on Earth combined. That outcome was not inevitable, but it is the inevitable consequence of neoliberal economic policies. So, unless we stop worshiping the god of shareholder value, stop listening to dead economists, and stop pretending Ayn Rand was a real economist, then our entire planet will be controlled by Amazon, Alibaba, ExxonMobil, China National Petroleum, Berkshire Hathaway, Volkswagen, Apple, and Microsoft. Is this what we want for the ADA economy?
We All Have a Choice in How We Interpret Information. I’m sure a couple people will attack me (again) for various reasons and they will say that I have no right to tell them anything. OK, attack me and ignore everything I say, but at the end of all their attacks and false accusations, the reality of our bubbles remains the same; and it’s the bubbles that create misunderstanding and conflict, not my words. So, if they truly care about this community and Cardano’s long-term sustainability, I hope those couple people who have attacked me will try to understand why a significant portion of our community believes that ecosystem sustainability is a much higher priority than unlimited profits/power for a tiny number of lucky whales who happened to be born in the right place at the right time. (No offense to the whales. I understand it’s not their fault, but it’s still an unresolved problem.) Those conditions might be tolerable for a for-profit corporation, but not for a global nonprofit socioeconomic platform and cryptocurrency for humanity.
Meaningful Awareness Comes from Substantive Education, Experience & Discussion. A couple people complained about me writing relatively more substantive posts. To those people: I understand most people get their information from Twitter and Facebook today. I’ve written entire books on these topics, but I only share a few paragraphs (a few pages in this case) with you here because I know everybody is busy and many people prefer to get their education from Twitter and Facebook. So, if you’re one of those people, feel free to completely ignore my posts and get your education from Twitter and Facebook. For the rest of our community, thank you very much for reading my posts, expressing your appreciation, and making this community so much fun. Your positive feedback helps to offset the negativity of the others and to keep our collective hope alive that we will be able to resolve these issues over time.
We All Have a Lot at Stake. So What Can We Do Now? In addition to the ideas discussed in the other threads, IMHO, we can all think creatively and post ideas about how various types of stakeholders and value streams throughout the ADA economy can be rewarded with ADA automatically by a future version of the Ouroboros protocol. I think the overall goal can be to find legitimate ways to reduce the concentration of wealth/power throughout the ADA economy to a Gini Index of below .40 within some reasonable period of time. Without that, ADA will never be a truly viable global cryptocurrency because its volatility will be way too high with whales thrashing around the entire ADA ecosystem, drowning out any possibility for real transactional commerce.
I was thinking in terms of solutions to our whale debate at the end of my post above, but here are a few interesting questions to think/post about if people just want to focus on the overall topic of this thread:
Has anybody had any experience dealing with people who were trapped in ideological / perceptual bubbles? How did you deal with them?
Has anybody ever said you were trapped in a bubble? Did you agree/disagree? And did you admit it?
It’s probably hard for many people to admit when they’re stuck in a bubble, even when they know deep down that they really are. This has happened to me when I’m debating certain people to whom I don’t want to show any weakness. In a public forum, it takes a lot of courage to admit when we’re wrong. I try to resist that feeling because I think we earn more respect from most people when we have the courage to admit we are wrong (and human).