Are Web3 all Marxists now?

Is the era of massive hyper-financialization, anti-regulation, and artificial scarcity web3 really Marxist?

“We are all Keynesians now.”

——Milton Friedman, 1965

“In one sense, we are all Keynesians now; on the other hand, no one is no longer Keynesian.”

——Milton Friedman, 1966

There are many reasons to say that Web3 made us all Marxists, and perhaps no reason is more absurd than the fact that the Web3 OGs really hated Karl Marx.

Take Nick Szabo (American Computer Scientist): academic, crypto guru and Bitcoin inventor, occasionally rumored to be a wise man, who bemoaned Marxism for inciting closed societies. Or to quote Szabo himself: “How fucking sick can a sick brain be?”

Likewise, in the case of Ameen Soleimani, creator of Moloch Dao, RAI and span kChain – indeed one of the most innovative and influential thinkers in the field – he not only Agree with Szabo, and also argue that KGB psychologists believe: “America has been invaded by the spiritual virus of Marxism.” ” The seeds of social unrest are planted when the poor are told what they want to hear – that they are equal to the rich, ” Soleimanini wrote .

But it’s not just crypto figures on the right who think Web3 is fundamentally unMarxist, the hypermarketisation of crypto means that many on the left also understand crypto as an accelerated form of capitalism. “Cryptoeconomics is also in some ways similar to the opposite of the commons: enclosures,” Nathan Schenider recently wrote, as “what was once a common denominator becomes an asset that can be owned and traded.” For Soleimani, this This hyper-financialization brings “things that were previously difficult or impossible to buy and sell, from crypto computing power to real estate in digital games” and gives them value by artificially making them scarce, it will give them away for free Privatize everything for everyone.

Meanwhile, arguably the left’s foremost technologist, Cory Doctorow, has accused Defi of being “shadow banking 2.0”, bringing a huge amount of money to the economy while enriching the 1% risk. “If all the money goes to the same number of billionaires, I don’t care how the banks distribute it,” he wrote. (In fact, about 0.01% of bitcoin holders represent 27% of the wealth.)

So how blue ocean does it make us think that web3 could be a Marxist encryption pill? How can we come to such a conclusion?

Let me try to answer first by way of example, or rather another important question: will communism be a DAO?

Back in October, I conducted an experiment reposting three passages from Marx’s German ideology, replacing the word “communism” with “DAO”, and you can judge for yourself how well it worked.

Are Web3 all Marxists now?

The original text reads: “Communists do not oppose egoism rather than selflessness or selflessness…. They know very well that egoism, like selflessness, is a necessary form of individual self-assertion. Throughout history, the “general interest” has been determined by the Personal creations defined as “private”.

Note the assertion relationship here: Collectives only function well if they satisfy the self-interested needs and desires of their individual members, never losing their sovereignty.

And this claim is repeated.

Are Web3 all Marxists now?

The original text reads: “The true intellectual wealth of an individual depends entirely on the wealth of his true connections, and only then can the independent individual be freed from all kinds of national and local obstacles. This total dependence will be passed through this communism. The revolution turned into the control and conscious mastery of these powers, which have so far ruled over people as powers that are completely contrary to them.

Again, it is paradoxical to stress that individual sovereignty is the foundation of collective emancipation.

This paradox is also the gist of Marxism’s last tweet.

Are Web3 all Marxists now?

Original text: “The modern state, the rule of the bourgeoisie, is based on freedom of labor. Freedom of labor is the free competition among laborers. (In contrast) the free activities of the Communists are the free development of all human abilities. The resulting creative expression of life.

Once again, we feel the same assertion that true collective freedom means liberating individuals to do what they want and do what they want.

But more broadly, note that there is a claim here—that is, that “Marxism” is not so easily reduced to a clapping solution or a nitpicking slogan, let alone the horrors of 20th century National Socialism. Because when we understand Marxism as dialectics, not as dogmas, as a series of claims and paradoxes, we can understand one of its main points of value: it is a framework for solving problems that may not have any answers at all .

Therefore, for the purpose of this article, we will discuss three questions raised by Marx, all of which revolve around the asserted relationship between individual sovereignty and collective cooperation that currently make up the three main categories of Web3: NFTs , DEFI, DAO.

Question 1: Do workers own the means of production? Or is the ownership revoked? (aka NFTs)

This is a question so obvious that it is difficult to answer: Did Marx generally advocate the abolition of property and ownership in his writings? Or does he advocate a redistribution of ownership to the proletariat, that is, they can own the means of production?

The issue runs through even dogmatic documents like the Communist Manifesto, which alternates between wanting to wipe out property and wanting to hand it over to the workers. In this sense, Marx and Engels wrote in the Communist Manifesto, the theory of the Communists can be reduced to one sentence: the abolition of private property.

This sense of assertion haunts the text, which Marx and Engels try to hide by explaining, on different points of view, that communism simply abolishes private property (not property in general, don’t worry about the average worker of the Union!), the real purpose of which is Deprivation of illicit gains from the bourgeoisie. However, they don’t have a good answer as to whether they will destroy workers’ property, just arguing that this is a moot point given that history has done so: “The development of industry has largely destroyed it , and is destroying it every day.”

This is clearly a rhetorical avoidance of the issue of worker ownership – for despite the much fancier anti-property stance of the Communist Manifesto, we can see Marx’s paradox. For workers, owning the means of production means getting rid of ownership as we know it. “With the abolition of the foundations of private property,” he wrote in German ideology, “people acquire a mode of exchange, production, and their mutual relations, again under their own control.”

Instead, Marx wrote, trade is a system that rules the entire world through the relationship of supply and demand—a relationship that distributes wealth and misfortune among people, builds and overthrows empires, and causes nations to rise and disappear. Only Marx was afraid not of the tyranny of the king, but of supply and demand. In other words, supply and demand is an undervaluation of the things that matter most to us, be it food or love. Critics of NFTs will recognize the sentiment here: supply and demand assign value to commodities, not based on what they mean to us, but simply because of their scarcity in the market.

And now, what happens when workers control the means of production?

The Utopias of Marx and Engels:

“Once the distribution of labor begins, each individual has a specific, exclusive sphere of activity that is imposed on him. He is a hunter, fisherman, herder or critic, and must remain so if he does not want to lose his means of subsistence; Whereas in a communist society everyone can achieve anything he wants to do, society regulates production in general, thus enabling me to do one thing today and another tomorrow, hunt in the morning, hunt in the afternoon Fish, raise cattle at night, criticize after meals, as I have thoughts, don’t be a hunter, fisherman, herdsman, or critic.”

—Marx and Engels, The German Ideology

It turns out that the most important means of production are not factories. It’s “time” and more importantly, our own sense of self comes from having free time. These earn us the sovereign right to live the life we ​​want, to be hunters, fishermen, herders and critics, not hunters, fishermen, herders and critics, defining ourselves by our role in generating profit .
But again, note that there are claims about the roles of the individual and the collective – how does the social collective work if we are all doing what we want to do? Who is fixing the sewers and taking out the trash? Perhaps none of this is necessary if we live in small, sustainable communes; Marx simply implied, “Society regulates production in general.”

But whose society is this?

Rather than trying to answer the question directly, I wonder if we can reframe it in more familiar terms. For we might argue that this claim – whether to abolish ownership or give workers the means of production – actually reflects a deeper claim. Should we aspire to be sovereign as individuals, to own our identity, or in today’s parlance, our data and reputation? Or would each of us be better off if we gave up this selfish sovereignty in order to better support the collective needs of each other and society?

In fact, we can boil down these questions more to the deep proposition at the heart of Web3:
Do we want ownership of the products of our labor, or do we want them to be open source for anyone to use?

One way to understand this propositional relationship is to understand the creator economy of the past decade. Taking a step back, we can see that the creator economy is a precursor to Web3 culture, not only a product of unlicensed user-generated content (TikTok, Twitter), but also a general trend toward the freelance economy and soloists , soloists do whatever they like and get paid for their work.

It might sound like the creator economy has culturally turned us toward the belief that artists should own the means of production: what is a TikToker if not a Hollywood celebrity who owns the means of production? If not a prototype, what is a hype house? But we also remember that the creator economy is actually a product of free work that prioritizes mass engagement over monetization of “100 true fans.”

Taking a step back, we can see that the creator economy is actually the culmination of the failure of the gig economy, which has gained dominance over 40 years on the promise of worker sovereignty and the reality of worker isolation. Initially, freelancing was an attractive proposition for businesses, paying on-demand — or rather, paying as little as possible — as David Harvey wrote in As pointed out in the conditions of postmodernity: “Employers take advantage of weakened union power and surplus labor pools to push for more flexible work systems and labor contracts.” The destruction of the corporate ladder, as the hierarchy of the corporate ladder disappeared before the new ideology that worked for itself.

But in a world where 35 percent of U.S. workers are gigs, this commitment to being the fisher, hunter, and critic at will also means giving up structures of steady income and liability support, as the safety net of freelancers is stronger than ever. Less time and less demands on workers’ rights – because they are on their own.

Likewise, the creator economy promises us a Marxist vision that anyone can be successful as an artist, but only if operated by platforms that make exorbitant profits from the workers who make them successful. That’s true for Uber drivers, and it’s true for TikTokers. We can say that this is the price of open source for freelancers: their work is free for anyone to use, while the platforms they operate remain siloed and deeply monetized.

In other words: Freelancers get open source, but platforms get ownership.

Are Web3 all Marxists now?

So what is the answer? Arguably , Web3 is a response to the failure of the corporate ladder and the polarization of the economy , with isolated companies on one side and open market freelancers on the other. This is where we come back to Marx. Because the promise of independent sovereignty will only work if there is indeed a “society” to “regulate general production” and we can hunt and fish as we like. We can only have our own work if we are also willing to support each other for the collective good.

Obviously the DAO is an answer we’ll come back to here later – a kind of consensual state as a company that lets us earn all of our income from our work, while sharing it without permission, and abolishing the rights to it personal ownership.

But simpler models are NFTs.

Are Web3 all Marxists now?

On the one hand, NFTs represent creators who ultimately get paid directly for their work. On the other hand, this ownership is clearly a social construct built on open source infinitely reproducible jpegs .

In other words, NFTs allow us to see what it means for creators to own the means of production (their art) and capture the full value of what they produce, even if the work itself is not private property at all, but is open to all.

NFTs abolish ownership to make it work for creators-workers.

Question 2: Is liquid capital a disease or a cure? (aka defi)

The ownership issue is much more than an asset issue. It’s also a question of whether we should own our own money, rather than the power of central institutions like banks or even governments that already use it to fund everything from subprime mortgages to wars. Or, does this open the way for what we call roller coaster sovereignty – massive financial abuse, money laundering, hacking, scam artists and extreme volatility without government regulation?

In other words, are we our own best financial custodians?

More strictly, we are asking, is liquid capital at the heart of the contradictions of capitalism, or is it the solution to capitalism’s deepest problems? This circulating capital is what Marx called “circulating capital” in Grundrisse, and can be easily turned into cash or converted into commodity capital. This circulating capital, Marx wrote, “is irrelevant to each concrete form, and any of them can be stripped or adopted as an equivalent incarnation.” In the form of owned commodities, liquid capital can take any form and is not limited to one use case or even one specific domain.

By contrast, let’s isolate some of the key characteristics of fixed capital that cannot be liquidated and see why liquidity might help solve some of capitalism’s main challenges.

  1. Fixed capital:
    infrastructure (machinery, factories, airports).
  2. General purpose single (measured by value in use).
  3. Requires huge upfront costs from the loan.
  4. Significant investment is required to build and maintain the overstock.
  5. Absorb surplus value (companies charge more for goods than they cost to manufacture).

Note that fixed capital is at the heart of some of the most predatory aspects of the history of capitalism: jobs are overcharged, workers are underpaid, and the constant production of Loans with many currencies to meet exorbitant interest rates.
On the other hand, working capital does not have these problems.

  1. Liquid capital:
    no geographical restrictions.
  2. Can be used to represent any item or commodity.
  3. Can be used for any purpose.

Fully liquid working capital does not face the frictions and costs of time and place, such as depreciation, backlog and up-front costs that require significant capital that must be returned at a premium later.

So when we define liquid capital this way, we might think of it as something else: digital currency.

digital currency:

  • There are no geographical boundaries.
  • Can be used to represent any item or commodity.
  • Can be used for any purpose.

In other words, can digital currencies or cryptocurrencies be the solution to real-world scarcity?

Not so fast, there is also the view that this “pure capital”, this capital that is out of touch with the real world or actual use, is valuable because it facilitates loans, surplus value, backlogs and everything else system. As David Harvey wrote in “Marx’s Capital,” circulating capital “appears when money is thrown into circulation to obtain more money.” Its purpose is to breed more capital, Let’s be tied to a world where we often have to work below wages to generate more value to pay off loans that don’t yet exist.

So what happens when fully liquid capital, unconstrained by time, space, government regulation or TradFi (traditional finance) orbits, can be instantly deployed anywhere in the world, by anyone? Will online operations allow for the first time in history that working capital does not need to service fixed capital? Or, as NFT critics have argued, does this mean we need to recreate the scarcity dynamics that underpin the economics of supply and demand in order for digital products to have value?

Are Web3 all Marxists now?

In other words, are we creating Shadow Banking 2.0 with all the dangers of unregulated crime, or are we creating Occupy Wall Street 2.0?

Are Web3 all Marxists now?

Recently, Hilary J. Allen made a very convincing case that an economy of liquid money would lead to the proliferation of capitalism. Endless liquidity means it’s easier than ever to overleverage, and to make things more financially dangerous, there is no federal bank to support the cascading margin calls that could result. If every transformative technology has experienced massive financial bubbles that drag down economies when expectations outpace innovation, then we can only speculate when the next generation of technology itself is capable of large-scale, unregulated How scary the crash will be when it comes to lending.

Are Web3 all Marxists now?

But there are arguments to the contrary.

Because we can also say that liquid capital enables financial sovereignty because we no longer need intermediaries that benefit from our money. It turns out that financial sovereignty applies to anyone who puts money in a bank, just as it applies to workers. Going back to the labor paradigm, we might imagine that just as workers are paid far less than the value they provide to factories, so are our savers paid far less than the value we have historically provided to banks — although we must also Payment of hardship relief funds to the government.

DEFI is based on the idea that we no longer have to pay for banks’ failures, not their successes . Because now, we can perform the function of the lender ourselves. In the traditional banking model, you would deposit $1 in the bank, the bank would lend it to someone so you and the other lender would each have $1, and the bank actually earns your money by generating $2 in the economy money, while making you an unwitting, involuntary, and unprofitable lender to other people. (I’m simplifying, but this is the principle of money multipliers and bank runs.). This is not possible in Defi, you can provide liquidity to the market yourself, or if you wish, deposit $1 and get a synthetic token representing its value. There is also $2 in the economy now, but one is fully collateralized and the other belongs to you.

This is what we mean when we say Defi is backed, and while it’s clear that in the real world we’re heading towards a future of under-collateralized loans and generating crypto loans for fixed capital, financial sovereignty gives us volatility because It enables us to be our own lenders and market makers — and losers without a state.

This begs the question: perhaps we should create money out of thin air to stabilize the economic system? This brings us to the last part, about DAOs.

Question 3: Can investing allow us to live the life we ​​want? Or do they force us to stay in debt for the rest of our lives?

To invest with any expectation of return is to put money in the world and hope more money will come out – which raises the question, where does it come from? What creates this new value?

Exploitation of the poor and expropriation of land are the two answers, and while Marx’s legacy is often intertwined with the former, for most of Capital he is primarily concerned with the third issue: debt. For Marx, debt is fictitious capital: an obligation to future money that does not formally exist, but is itself voluntarily formed. For example, I mentioned in Ray Dalio, The Marxist last year that if I lent my friend $5 and they wrote me an IOU, I might now use that IOU as collateral, Even other friends’ currencies — so now $10 replaces $5, or even more if interest is included.

We might think that Marx would condemn the entire capitalist enterprise system as a guessing game built on IOUs, and once the IOUs are satisfied, the economy will collapse. But in fact, Marx makes a key distinction here: For Marx, investments in companies — stocks — represent real capital precisely because they are not “twice existing” as loans and money ‘s IOU.

The stocks of railway, mining, shipping and other companies represent actual capital, that is, the capital invested and operated in railway, mining, shipping and other enterprises, or the amount paid by shareholders for the capital used in the enterprise. This does not rule out that these may be pure scams. But this capital does not exist twice, once as the capital value of ownership (stocks) and once as the capital that is actually invested or will be invested in these businesses. —Marx, Das Kapital, Chapter 3 29

Note the difference between debt and investment, with debt, your $5 loan is always worth $5 (plus interest), so your IOU can easily become currency or collateral. For investing, however, your $5 cannot be considered $5 anytime you like: how much it is worth is determined by the market, and it may rise or fall over time. In other words, investing is different from debt in that it does not guarantee you a return in any form, it requires the funds to exist twice, first as the amount to be repaid (the IOU) and second as the amount being used or lent ( the loan itself).

More importantly, investments are not what Marx called “illusory capital” because they are not “interest-bearing capital”, which Marx defined as “the accumulation of claims on production, the accumulation of market prices”. To perfectly embody this “illusory capital”, Marx points us to state bonds: since bonds need to be paid with interest and they cannot actually be used to generate themselves, they are actually money created out of thin air. (For those who associate Marx with the specter of 20th-century National Socialism, or who think he advocated for an all-powerful government to regulate business at all times, his shadow on the states here should make We wake up.)

However, there is a small trap in the public market and a bigger trap in the private market. Because where did the valuation of this stock come from? Well, it comes from the expected future returns of a company that we expect to perform well.

So we’re actually making money out of thin air. If I invest $2 million in your company at a $20 million valuation, my $2 million is real capital, but the other $18 million is just a mythical entity created out of thin air that we hope to monetize in the future earn value. These valuations, like debt, are claims on future production.

This didn’t matter to Marx because there has traditionally never been a way to tap into these claims or use them as capital: as long as the IOUs cannot be traded as their own money, the money doesn’t exist twice.

But at The DAO, it suddenly changed because now we have replaced stocks with tokens that we can trade, buy or invest with (assuming the SEC allows us to do so).

But there’s another, even bigger meaning in Play – DAOs allow *anyone* anywhere to create tokens that are essentially claims on future value, and raise funds from anyone they like. Now, anyone can enjoy the benefits of phantom capital without having to actually repay the interest.

Are Web3 all Marxists now?

We can start to see the risks DAOs pose to the financial system. Many of these investments do not return their valuations, and the democratization of finance, without proper education, presents a huge opportunity for fraudulent or even failed projects to profit from investors who fail to do their due diligence.

But even so, by letting us create our own currency, DAOs can help us innovate and invest in our projects in ways that would never have happened before Web3. Owning your work is one thing. Being able to fund the work you want to do is another thing – it enables a real collective of workers to control funding, removing barriers to labor and capital. Because now you can imagine DAOs “investing” in each other by exchanging tokens to support each other’s projects. Replacing the traditional investment ecosystem with capital (investors) on one side and labor (founders) on the other, a DAO-to-DAO (DAO to DAO) token swap means both parties are represented.

Are Web3 all Marxists now?

In other words, DAOs embody all the tensions we’ve discussed above: between workers’ sovereignty and giving it up to the collective, the liquid capital that enables us to be financially self-sufficient, and the one that pushes us toward a future that only sees investment and Between the illusory world of returns, the real capital invested in the projects we create, and the phantom capital that uses that money to fund future value. If there are no clear answers to these paradoxes, these questions, at least have multiple-choice optionality.
It’s this optionality that seems special, um, Marxism. In an age of massive hyper-financialization and multi-billion-dollar venture capital, this may be the real meaning of DAOs, and in the shadow of the corporate and gig economy, even VCs now speak like Marxists The real reason: The great goal of Web3 is not only to give builders financial sovereignty over what they are building, but to allow everyone to build as they wish.

Special thanks to Li Jin and Bhaumik Patel and Tom White for comments and editing.

Posted by:CoinYuppie,Reprinted with attribution to:
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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