Jason Hiner has a provocative piece over at ZDNet titled “Yes, Blockchain could reverse the course of civilization and upend the world’s most powerful companies.” Does the premise hold any merit? Hiner gives a 20,000-feet view of how blockchain tech could disrupt at least four industries: banking, energy, music, and journalism. He ends the article:
We have to consider the fact that Blockchain could rewrite some of the rules of capitalism, which naturally favors concentrations of wealth. [Co-author of Blockchain Revolution Alex] Tapscott thinks of it not so much as redistributing wealth as “pre-distributing” it by opening up more opportunities to more people, by default.
I agree with all but the part about rewriting the rules of capitalism. Actually, Hiner has struck on something quite profound, though he may not even realize it. What he thinks is a revision of capitalism might actually be the culmination of capitalism: private ownership of the means of production at a radically individual level. Socialists have always feared that capitalism concentrates wealth within the “capitalist” class – those who have the access to capital necessary for mass production. But what if mass production was simply a step in the process of capitalism until newer technologies (created thanks to capitalism) made the mass production system obsolete?
Perhaps Hiner makes the mistake, as many do, of equivocating capitalism with mass production. But mass production is only one possible model within a capitalist economy. The only prerequisite of capitalism is private ownership of scarce resources. How that plays out in the free market is limited only by technology and the human imagination. In fact, we know that, despite talking about it in aggregate terms, “consumer demand” is always specific and individual. There is no “demand,” there are only millions of demands – as many as there are consumers. If we could get a product that met our exact specifications at an acceptable price, we would. Mass production is the best system we’ve come up with so far to meet a general cluster of demands in a cost-efficient way. But that’s changing.
With the advent of 3D printing, there is a real possibility that in the not-too-distant future, we can make our own products that meet our own particular specifications without needing a large corporation to produce it for us. With the blockchain protocol, we can run a one-man taxi service without even needing Uber to mediate and verify the exchange of trust. We can make a product in our basement, sell it on a decentralized app, verify the transaction on the blockchain, and ship the product via our personal drone to a buyer across town. We can become self-employed entrepreneurs who don’t need large amounts of capital, extensive infrastructure, or an established employer to generate a living income. And none of this violates the fundamental rule of capitalism: private ownership.
We’ve always assumed that capitalism creates a wide income inequality gap. But the advent of decentralizing technology may reveal that capitalism’s true nature is to diminish inequality and favor the “little guy” after all.