Steem, Democracy, and Modern-Day Capitalism
Back in my university days, as the courses that I took are mostly social sciences, I had a bit of time studying market economies and government systems. From democracies to authoritarian governments, from socialist to free-market economies, I have more or less touched those subjects in the course of my studies. Having lived in the Philippines for more than three decades before I moved to New Zealand with my wife, I have this bias towards democratic and capitalist societies every time those lines of thoughts are being brought into the discussion. In this regard, being an active member in Steem, I want to present something that I thought is relevant to Steem and how it relates to my thoughts in democratic and capitalist economies.
I always see Steem as being democratic. The simple way I define democracy is it is the opposite of an authoritarian regime. In Steem, people have the freedom to write and comment the way they want to. But like in democratic states, the liberties that we enjoy come with the responsibility and accountability to act within the what is allowed. You cannot write plagiarized content, or infringe on anyone’s work without acknowledging them. Penalties come into play – you will be given downvotes or be blacklisted – the same way you are penalized in real-life situations when you violate the law – fines, prison time, etc.
Steem operates the same way as a capitalist economy. In state economies, capital can be finances, natural resources, intellectual capital, human resources, and many more. In Steem, capital can be your Steem, or Steem Power (SP) or your intellectual capital – that is, your ability to write high quality content which can garner enormous amount of upvotes which translate eventually to Steem (and Steem Power should you choose to power up). In Steem, one’s success or failure is determined by how you take advantage of this capital economy – whether it is Steem Power or your writing prowess.
For most people, it will be the Steem Power. As those who have the means can just buy Steem and convert it to SP to be a player in the Steem economy. Not all has the talent to write, much more to write quality content that will attract the attention of big curators. And even if you have the capacity to write, your rewards will more likely be converted to SP and use them for curating other content in order to get more gains rather than by to depend only with rewards coming from writing posts.
My wife and I like to watch home renovation shows. One of the TV shows that we always watch is The Block. There is an Australian and a New Zealand version of this show. It features pairs of contestants who will renovate a block (usually an apartment block) and week by week, they will build a part (or parts) of the house assigned to them. At the end of each week (which is called The Room Reveal), the judges will score each room and whoever gets the highest number will be the winner. The winning pair will get cash prices to be added to their overall budget and/or other advantage going on to the next rounds.
Why did I mention this show? It is because the show highlights how capital (the renovation budget in this case) plays a big role in the outcome of the show. When a team wins a Room Reveal and gets additional cash price, they can use that money to buy more furniture and building supplies, or pay more tradies (e.g. builders, painters, tilers, etc.) which will be an additional advantage moving onto the next Room Reveal. The more money you have, the more things you can do, the more things you can do, the better chances of winning the next round.
It is the same environment in Steem, the more SP you have, the greater rewards you get compared to another user who has used the same voting power but has lesser SP. Ceteris Paribus (it is a Latin phrase which means all other things being constant, and is a common term used in economics), people with bigger SPs will outperform people with smaller SPs. With more rewards, you can use them to buy tools and resources to increase your earnings. Even recovering your voting power takes faster for those with largers SPs.
In a capitalist economy, you have your producers and consumers. Producers manufacture the goods while consumers as their name implies, consume the goods produced. In Steem, the producers are the content authors. On the other hand, consumers are the curators. In a perfect sense, it is not only the curators, it also includes all the other readers of that content regardless if it is being curated or not. But for the purpose of this analogy, I will just focus on the curators as the consumers of content. In a normal economy, you spend money to buy good and you get what you pay for. However, the good thing about Steem is that you don’t really need to spend to “consume (curate)” content. When you upvote something, you are only using your voting power which you can recover in an appropriate time period. So it’s like going inside a store, buying something without really giving the money to the store and the State (which is in this case the Steem blockchain) will give both of you a percentage of what you pledge to spend for that product. The State just set some restrictions on how many times you can pledge in a day (voting mana) depending on how much you pledge to spend (voting power).
Capitalism for me is another way for wealth creation. You use capital to earn, and use those earnings as capital to get more earnings. I see Steem (and most like all other cryptocurrencies) as a way to create wealth which we haven’t thought possible probably twenty years ago. For instance, if my 100% vote is worth $50 and I upvoted someone’s post, at 50/50 share, I can earn $25 out of that vote, and so is the author of the post I upvoted. It’s like taking a rabbit out of a hat. That click of a mouse (the upvote) generated wealth in an instant. I remember the time the domain sex.info was sold for $14 million USD. It may be arbitrary like any other names, but that name alone was worth more than hundreds of people can earn throughout their lifetime. Bitcoin for instance, critics will say it is just a bunch of binary codes and does not really offer something tangible. I certainly agree to that, it is just computer code, which makes up the blockchain, but that code translate to billions of dollars. There are many people who have become millionaires through this economy which probably won’t happen had they continue to work in the traditional economies that we know.
The challenge for everyone is to learn how to be a part of this modern-day economy and have a slice of the wealth it generates. Traditional economies are starting to embrace this paradigm and do not let yourself be left out of the pack. Take a read, have a go, and share the ride with us.
I hope you learn something with my analogies and I appreciate your feedback by commenting below.