
Ushering in the age of Hypercapitalism with the Blockchain - skilesare
https://www.dropbox.com/s/k97dzssxc58ux1s/hypercapitalismwpv1.1.pdf?dl=0
======
mindslight
The worst part about it is that Bitcoin won't even support pure capitalism as
its supporters envision, but will precess into crony capitalism just as we
have today.

Money _needs_ to be anonymous. When it is not, redemption and transfer will be
given special preference based on _who you are_ rather than an independent
value. When you perform a transaction and its effects aren't solely the
transfer of value or you even need to file paperwork to report it (!), you're
not really dealing with money. When a transaction can be reversed after it's
been made, you're not dealing with money.

And while Bitcoin currently has these properties in that a name isn't tied to
a transaction, the blockchain is simply a list of which psuedonyms gave what
to who. It lacks the important property of "untraceability" which prevents
malicious actors from tying nyms to your singular government mandated identity
(cf Chaumian tokens) and therefore implementing these "features".

(And for the inevitable response, no, ad-hoc mixes are not a solution. They
force the attacker to be active (eg pass laws) instead of just passively
watching. When untraceability doesn't apply unconditionally to every
transaction, then transactions which attempt it will be gradually more frowned
upon. It's not hard to envision a future where types of Bitcoin users are
progressively forced to register their wallets).

~~~
skilesare
I flip this on its head. Would you hold some apple stock anonymously? Probably
not. You want the dividend. We move value transfer to a 'no cash without
capital' so that you really aren't interested in being anonymous anymore...or
if you are you are forfeiting a significant future benefit. (I do propose a
system of privacy pools for transactions that need to be private, but in
general this isn't necessary.)

~~~
kanzure
> Would you hold some apple stock anonymously? Probably not. You want the
> dividend.

Oh, that is nearly trivial with some of these systems. Dividends can be spent
to the same scriptPubKey (or other mechanism) that controls spending the stock
itself. I mean, in a system where there is apparently a "stock" asset,
naturally.

------
Animats
Here's the author's bio: [http://austin-fatheree.blogspot.com/](http://austin-
fatheree.blogspot.com/) He's not an economist. He's a .NET and MSSQL
programmer.

What he seems to have in mind is a scheme where labor creates tagged money
which returns rents to the laborer. There's a cost to holding money; all money
is an interest-bearing loan. Whether this would result in a working society is
questionable. Then again, we currently have some negative interest rates,
which do the same thing to holders of cash.

The bookkeeping complexity would be high, but there's enough compute power
around to handle it. The size of the problem is comparable to merchant reward
points, which stores are now willing to track for the smallest purchases. The
"blockchain" is probably the wrong tool for the tracking job - too many small
transactions.

It would take a very authoritarian society to impose this scheme.

~~~
skilesare
That is me...although that hasn't been updated in a while.

I'm glad you were able to get that out of the paper as that is what I'm
calling for...I have no idea if it will work or not, so I'm going to try to
build the experiment.

The bookeeping part is what is interesting. It is all already in the
blockchain. We will have to solve bloat, but the current blockchain tech
captures most of the info I need.

I have some answers to the authoritarian side of things as well...but that
isn't in the paper. Specifically elective taxation and the citizen veto of
cash accounts where the citizen accounts can vote to veto the use of
government accounts. To get the veto you have to pay the tax.

------
natrius
This seems roughly equivalent to paying laborers with equity so they have a
claim on the full benefit of their labor. One difference is that this
hypercapitalism scheme spreads the claims on rents across the economy rather
than just within one company. That could be solved by paying laborers with a
broad index fund.

Of course, they'd have to sell most of their income to pay for things. Only
their savings would remain as equities. This seems equivalent to being paid in
the prevailing currency and using your savings to invest, which is the current
system. It also doesn't require anyone to force people to use a currency with
demurrage fees, which no one would voluntarily choose.

Very interesting read, though. If you're going to implement this as an
experiment, you'll probably have better luck building on Ethereum than a
Bitcoin fork. The downside is that Ethereum isn't architecturally stable yet,
which makes development a little rough. The upside is network effects and a
blockchain you don't have to build or get people to mine.

~~~
skilesare
I isn't roughly like that though. In fact, as a laborer, you must pay your
employer in stock for them to have the privilege of paying you. The stock is
going in the other way. I also don't spread it across the whole economy, but a
specific part of the economy that the laborer interacts with. (after a few
iterations you get a six degrees of Kevin Bacon effect, but most of the
benefit is local.)

But yes, the goal is the full benefit of labor.

I'm going to start on bitcoin because of the infrastructure. The experiment
won't be distributed, but it will get there if it is successful. Multi-sig is
enough for us to establish the distributed accountability that we need.

------
hardwaresofton
Interesting read... Two things:

1\. I think the argument about objectivistic capitalism being immoral was not
fleshed out enough at all, a claim is made that it's just as bad as
governmental "theft", but I feel one of the most important distinctions, the
use of force, is not covered at all. How do independent actors in the market
force you to buy their goods (and pay their economic rent?)

2\. The actual idea is extremely interesting, and I liked reading the paper.
(SPOILERS) - It's interesting to think of employees as really working for a
portion of future proceeds rather than current pay... However, I don't think
this model fits all business types, and it doesn't go into the humanist
aspects of what happens when businesses fail.

~~~
skilesare
1\. It is true. My talk has little of this. I was pissed at Ayn Rand when I
wrote this. But I think I answered your question in another thread. If you run
out of gas and walk five miles, the gas station owner has you at a
disadvantage. He can charge you $50 for the gas can or $5. What is 'fair'? I'm
not sure I know, but most of it is economic rent that you are 'forced' to pay.
Mostly because you are stupid, but still...

2\. One thing not covered in the paper is the compassionate bankruptcy that is
in there.
[https://github.com/skilesare/art_and_democratic_hypercapital...](https://github.com/skilesare/art_and_democratic_hypercapitalism/blob/master/hyper_capitalism/clear_outs.md)

~~~
hardwaresofton
Ah thanks for the clarifications

------
TheMagicHorsey
"... capitalism’s intrinsic reliance on taking more than its share in any one
economic transaction. "

What does that even mean? Capitalism the ideology takes more than its fair
share of any one transaction? How does an ideology take a share? Does he mean
bankers take more than their fair share?

What is a "fair" share?

If that is in the first paragraph, what hope can the reader have that this guy
is going to think rigorously about things in the rest of his paper?

~~~
skilesare
I could have been clearer here. I had a debate with a Randian that was trying
to convince me that taxation was theft and I leaned a little too far in that
direction with this paper.

I specifically talking about the fact that a lot of 'profit' or 'economic'
rent takes advantage of the disadvantage a person is in. For example, the gas
stating that charges $50 for an empty gas can to the guy that just walked 5
miles because his car ran out of gas. Of course you CAN charge it, but should
you?

------
roymurdock
1\. Naturalizing Cash > "What does it mean to naturalize cash? It means that
cash must also suffer from entropy."

Cash already suffers from entropy. One of the fundamental concepts of finance
is the Time Value of Money (TVM) which (in layman's terms) states that a
dollar today is more valuable than a dollar tomorrow due to its potential to
earn a return over that time period. If you don't put your money to work
earning a return, you are losing value.

Inflation is another force that devalues the real value cash. Even if we take
the author's unsubstantiated claim that we have "managed to control
[inflation] well in the last couple of decades" as a truth (which is clearly
refuted by the current deflation in parts of the Eurozone and Japan as well as
the inability of the Federal Reserve to consistently hit a target of 2%
inflation), inflation still reduces the purchasing power of cash.

2\. Economic Rent as Theft >

"Economic rent is the amount charged for a good or service above and beyond
the cost of creation." AKA profit. Generating profit is not immoral, nor is it
theft. The only way that I could partially agree with the author here is in
the case of an oligopoly or monopoly forcing consumers to pay exorbitant
prices for some necessary good. This is why we have the government, laws,
regulations, and anti-trust agencies.

3\. Making Everyone a Capitalist >

"∑bT must be established so that it supersedes the value of the labor at the
time the laborer gets paid. To do this we need to make everyone a capitalist.
When one account pays cash to another account, we keep track of this and give
the paying account a ‘share’ of preferred stock in the paid to account equal
to the dollar amount paid."

So basically hypercapitalism is a way to make every person into a corporation
with dividend-paying equity. People contribute their own labor in order to
obtain equity shares in other people. I think this is a cool idea. As long as
the number of people in the economy increases without bound, then this idea
could work. See the transition from PAYGO to fully-funded social welfare [0]
as an example of another system that only works as long as the population is
growing.

[0]
[https://research.stlouisfed.org/wp/1997/97-022.pdf](https://research.stlouisfed.org/wp/1997/97-022.pdf)

~~~
skilesare
1\. There is a difference between the unit of a dollar and a value of a
dollar. I think we need to degrade the units. Re:Inflation, it would be better
to control this then to just let inflation take it's course. 0% inflation is
the target.

2\. I agree with you, but is it a black and white distinction or a gradient of
gray? The truth is some rents are good and some are bad and it is very very
hard to separate them...so instead we overwhelm them from elsewhere and make
them matter less.

3.Yes. And the theory relies on the long term increase in human productivity.
In the event of a near extinction event you're going to have bigger problems
than the economy not working. It can endure short term bumps in the road and
actually has anti-fragile properties when it encounters volatility.

~~~
roymurdock
1\. Moving from a relatively non-degradable substance such as gold or an
easily-replaceable substance such as paper to a degrading unit of exchange
completely conflicts with one of the major functions of money: a store of
value. Fine, it can work for things such as cattle and if we accept your
argument, humans. But one of the fundamental reasons paper currency exists is
for small cash transactions. Are you going to exchange some of your equity for
that weekly bag of groceries? How about that tank of gas? How much equity is
that cup of coffee worth to you? I'd be interested to see how hypercapitalism
could deal with these simple transactions.

As for inflation: is it as simple to control inflation as you suggest? Why is
0% the target? Inflation is a terrifically complicated subject.

 _While there is agreement that inflation is costly and should therefore be
minimized, for a number of reasons policymakers nevertheless aim for an
inflation rate above zero. First, available measures of inflation are
imperfect and tend to overstate “true” inflation. Second, a little inflation
may make it easier for firms to reduce real wages—without cutting nominal
wages—when necessary to maintain employment in an economic downturn. Third, a
negative inflation rate—deflation— could be even more costly than a similar
rate of inflation, suggesting that a low rate of inflation might be desirable
to insure against falling prices. Finally, at very low levels of inflation,
nominal short-term interest rates may be very close to zero, limiting a
central bank’s ability to ease policy in response to economic weakness.
Because nominal rates cannot fall below zero, policymakers cannot cut short-
term interest rates any further once they have lowered these rates to zero._

-George Kahn, Federal Reserve Bank of Kansas

2\. I'm not sure I understand your argument. What is "overwhelming" them,
where is "elsewhere," and how does that make some profits matter more or less
than any others?

3\. I think your argument would be much stronger if you did away with all of
the sections before your last and simply expanded on the possibility of
somehow specifying and selling personal equity vis a vis blockchain
technology. The rest is 100% going to draw criticisms and does not fully
support your interesting and novel idea. Just my opinion though.

------
invalidbasis
From an Austrian perspective, your proposal is garbage. Savings create wealth,
period. In your proposal, you describe a system that encourages faster
consumption (and thus faster depletion of resources, including the earth,
people, etc.) and discourages savings entirely. How do you not see the fallacy
in your logic? Why are you proposing reaping the planet's resources faster as
an ideal way to do business? At least by hoarding, and slowing production, the
world is incentivized to act more cautiously before blindly moving forward
with its precious resources. I suggest that the system you proposed would
result in the creation of a lot of unnecessary widgets, resources, and false
markets. A world that would quickly deplete itself. Trying to solve
inequality, by promoting more consumption on everyone's part, seems backwards,
in my opinion. There is likely a greater moral wrong in using resources, than
saving resources for a more legitimate purpose later on.

Your entire premise that we should reform society to favor consumption (even
more than it is already favored now) only exacerbates inequalities, because at
the end of the day, all you have to do to increase the value of Bitcoin, or
similar crypto-currencies, is incapacitate another user and render their
wallet outside of the entire money supply; since, it would be
cryptographically locked. The argument against Bitcoin, if any, is (that at
some point) it's deflationary mechanics will incentivize the elimination of
other users so that the remaining currency holders will hold a larger
percentage of the pie. If connected to an AI that was simply hellbent on
maximizing its percentage of the money supply, you can easily see how a
machine could learn bad ethics.

~~~
skilesare
I'm an anti-austrian. I think 'stored value' is the most bizarre concept. All
value is future value. From a statistical perspective you can never have full
confidence that the thing you are using to 'store value' will actually do so.
You can't predict the future. Even gold has its limits. Are we going to load
our Space plains with bullion when we fly to mars?

I'm not favoring consumption. This system actually creates a flight to value
and sustainable, renewable systems of production. Of course one of the things
you can do with your decaying money is spend on consumptions, but you'd be an
idiot because you're going to be getting stock in the producer of that thing
and if they are strip mining you upper limit of benefit is drastically
reduced.

~~~
invalidbasis
I understand your premise of stored value not being realized until the future.
However, it isn't some sort of universal rule. There is value in a lot of
things, even in failure, and loss; you are only considering the monetary value
in your statement. The possibilities of immeasurable value, that which aren't
strictly monetary, is all lost in saying, "stored value is bizarre."

If stored value is truly a bizarre concept, then society should completely
reevaluate schools, and learning in general. Even this discussion; because
what is the point, or value? Is storing any nuance of thoughts pointless? You
have a highly cyclical argument, favoring Singularity, and not allowing for
any other perspective.

Your attempt to laud your position and derail Austrian Economics with the
"Hauling Gold to Mars" example is insulting and disservices your own ability
to make a valid point. Already in place, society has a concept that dismisses
your absurdity, I.e., "Contracts;" which fully eliminate the need to haul
physical resources or commodity around and merely show them on paper. Not too
dissimilar to the blockchain.

From a statistical standpoint, statistics are irrelevant when they are put
into practice. For they either ARE or ARE NOT and DO or DO NOT come into
effect. They are a summation of the past, not its predictor.

In your very own argument, "You can't predict the future." But then go on to
argue people would "be idiots" for investing in "consumption" instead of
"productive" things or businesses. In a single paragraph you've argued against
your own theory. People can't predict the future, but they can somehow tell
what is productive versus not? Hah! I think the last business cycle is
evidence enough.

Your idea isn't completely without merit in its attempts to reward persons for
making good predictions. But again we already have similar systems for that
purpose already in place in the stock markets.

~~~
skilesare
We will have to see. It is a theory and I'm hoping to build some real world
and computer model experiments.

A lot of my ideas of what would be good to do are based on Chris Alexander's
idea of wholeness in which we actually have a better than 50/50 chance of
telling what a 'good' transformation is. If it is less than 50/50 then very
little will work.

I don't mean to insult. I need to do more study of what the austrian's really
put forward. It is my least favorite of the schools and I haven't spent as
much time learning about it as I should.

~~~
invalidbasis
Fair enough. Peace be with you. And good luck in your work.

------
cubano
_I have always had some misgivings about capitalism._

Well, I, for one, appreciate that you laid this out as the first sentence of
your paper/blog post.

And I'll agree to a point; capitalism is the worse system there is, besides
everything else of course.

No economic system devised will ever be able to directly fix the problems of
"lack-of-humanism" that you so describe. As shredprez succinctly put it,
"there is no effective way to control the inequities of power."

The best our system... _any_ system...can hope to achieve is to try to
guarantee equality of opportunity, but not equality of outcome.

Market-based systems such as capitalism have this feature baked into its' DNA,
as the market can never afford to marginalize any individual or effort, via
political means, that could threaten a working business model.

Although the plutocrats certainly try their best.

Blockchain technologies certainly have the potential to shake things up,
unless, of course, its crypto gets cracked soon, which many here seem to think
will be the case.

[edits]

~~~
skilesare
Did you read it? My ultimate conclusion is that our current capitalism is half
way pansy capitalism. This concept takes capitalism to an extreme and adds a
built in dampner for inequalities of power while still allowing for the power
of the market to opperate. In a sense we force a more oerfect operation of the
market.

~~~
cubano
Yes I have now, and I must admit I totally mis-characterized its content in my
OP, and although I don't necessary agree with all of your POVs, I do
appreciate the thought and effort you put into creating it.

------
skilesare
I wrote the paper, ask me anything.

~~~
ForHackernews
What makes this an academic paper and not a blog post?

~~~
LesZedCB
He called it a paper. It doesn't need to appear in a peer-reviewed journal to
be a paper...

~~~
skilesare
They called for papers and I wrote one.

