Can cryptocurrencies solve the nightmare of an ownership society? - From financial crisis to NFT

This article was written by Richard Woodall, a writer and researcher in Sheffield, UK. His research areas include the history and politics of visual technology, and the analysis and critique of digital capitalism. This article also has warning significance for Chinese society.

In a speech to the National Federation of Independent Business on June 17, 2004, President George W. Bush laid out his economic vision for a second term. "You and I both know that if you own something, you have an important stake in the future of our country. The more American ownership is, the more dynamic America is, and the more people who have an important stake in the future of this country. Stakes".

These words encapsulate the slogan that was supposed to define his legacy: "The Society of Ownership." Through a series of policies spanning housing, health care, welfare and finance, the goal is to increase the proportion of the U.S. population as asset holders, with a particular emphasis on homeownership. As Naomi Klein pointed out in a 2008 article , the plan came straight out of conservative political-economic game play. By encouraging private asset ownership, Bush and his allies hope to promote a model of citizens acting as self-reliant speculators, taking control of their futures by optimizing the risk and reward of individual asset portfolios. Not only will this, they argue, make the country smaller and the private sector more dynamic, but it will also create a new generation of Republican voters, just as Margaret Thatcher did in the 1980s by privatizing swathes of Britain's public housing Expanding her electoral base did the same.

The ideology of ownership frames the rights of citizens as being realized not in relation to the state or community, but through the market.

Bush's stated goal is to raise American homeownership to unprecedented heights, including the creation of 5.5 million new minority homeowners . Since he clearly disapproves of any form of state redistributive intervention, this goal can only be achieved through debt. From the early days of his first term, Bush urged builders, real estate agents and mortgage lenders to "remove barriers and create more opportunities for homeownership." At the same time, lenders began to accelerate the practice of offering low-interest mortgages to high-risk borrowers. These "subprime" mortgages were bundled into complex financial instruments that became the subject of highly leveraged speculation by investment banks, setting the stage for the 2008 global financial crisis.

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In Anglo-American society, the homeowner has long been seen as the ideal capitalist subject, equally a conscientious provider and a prudent investor. Owning your own home is thought to mean "security, autonomy and prosperity"; these qualities in the housing market can make up for what's lacking elsewhere. Instead of economic redistribution, everyone who can afford the initial wager can try to accumulate wealth by owning property; as an alternative to a true "democracy", people can express their social and economic preferences through investment decisions. The ideology of ownership constructs a world in which the rights of citizens are realized not through relationships with states or communities, but through markets.

For the Bush administration, this ideology was not just an end in itself, but a way to incentivize consumers to engage in a predatory financial system that used adjustable -rate mortgages not only as a way to get onto the property ladder, but as a way of rapidly accumulating way of family wealth. Buyers are lured into a labyrinth of financialized debt, generating a steady stream of junk assets that feed Wall Street's thirst for more extravagant profits. For the millions facing foreclosure after the collapse, homeownership does not mean stability and independence, but rather, poverty and dispossession.

Thirteen years after the Bush regime ended, the "ownership society" is more of a sick joke than ever. Currently, a large portion of the U.S. housing stock is owned by institutional investors , and homeownership remains a distant dream for minorities and millennials of all racial backgrounds. Meanwhile, the effects of chronic housing inequality have been exacerbated by the pandemic, leading to a new wave of evictions . Asset ownership in the United States is overwhelmingly concentrated in the hands of the richest 10 percent; globally, thesituation is even more dire . The ownership society "took advantage of the populace's desire for economic independence and turned it into a credit swindle on behalf of the financial elite".

This is an important context for understanding Bitcoin’s emergence and plans for the expanding cryptocurrency world. As political theorist Stefan Eich et al have pointed out, Bitcoin is clearly a post-crash phenomenon fueled by the fantasy of a digital currency whose value will be independent of states and financial institutions , the agencies went catastrophically wrong during the 2008 crisis. Famously, Satoshi Nakamoto's debut article on the Bitcoin blockchain referred to a headline in The Times on January 3, 2009, in which it was announced that the UK Chancellor of the Exchequer was considering a second attempt on the country's troubled banks. rescue. This cryptocurrency's Easter egg heralds the core focus of Bitcoin's mysterious founder and its liberal early adopters - finding a way to protect their money from government inflationary activity and developing a A system of digital property rights that exists outside of an institutional system of authority and trust.

More recently, this cyber-Hayekian vision has been supplanted by other blockchain futurisms aimed at appealing to less fanatical supporters. Currently, the hottest of these is "Web3," which promises to replace the rentier monopoly of Amazon and Facebook with a decentralized network of open-source applications built on blockchain and cryptocurrencies. This is a timely proposal. The pandemic situation has only re-emphasized the horrific control these giant corporations have over all of our lives. The desire for a more egalitarian alternative to Web 2.0 aligns with the growing prominence of platform cooperativism , as well as the broader movement for workplace democracy and worker ownership.

In terms of rhetoric and branding, this endless, community-focused discourse of so-called Web3 is indistinguishable from the right-wing accelerationism that underpinned the original Bitcoin movement. Venture capitalists Jesse Walden and Li Jin tout an " economy of ownership " that leverages the advantages of blockchain technology -- decentralization , composability , permissionless , and more -- to restructure the digital economy away from centralized platforms and toward A quasi-collaborative body managed by users, creators and developers who share decision-making responsibilities and profits. In this new world, creators will be empowered to " own the means of production and distribution, " resulting in a new political-economic solution in which capital and labor are "one and the same. "

From "ownership society" to "ownership economy". To its advocates, Web3 is the solution to aristocratic monopolies, massive instability and the entire necrotic legacy of the Bush era. At the heart of both visions, however, is the same belief that “democratizing” access to financialized asset markets will make the economic order fairer. This time, can we really make our own way to utopia?

Web3 requires acceptance of a shifting understanding of how ownership is integrated with digital spaces, at the level of what types of digital objects can be owned, who can own them, and how ownership is organized. Discussions around NFTs have focused on the first of these three issues. The largest NFT project — a collection of profile pictures like "Boring Ape Yacht Club" — claims that an otherwise easily replaceable object, such as a cartoon of a dazed ape, is actually a personal property, recorded in An "immutable" public database and stored in its owner's digital "wallet". What used to be an undifferentiated stream of content now has a universe of discrete objects that can be held, bought, and sold.

However, the ownership model enunciated by NFTs is extremely parsimonious. The tokens themselves do not confer any legal rights on the projects they are involved in, and as some hasty buyers have discovered , they pay a price. In the absence of a supplemental agreement to transfer copyright or other privileges, all NFTs guarantee is tradability on the online marketplace. In this sense, they are objects that exist entirely on the market and serve them, and all other qualities than economic are ineffective.

So it's no coincidence that the most popular NFTs are so visually mediocre. Part of their purpose is to guide buyers through the joys of the original property, unencumbered by use, aesthetics, or any other messy idiosyncrasies that tend to be attached to the actual thing. With a Pavlovian economy, the experience of ownership is reduced to the fetish pleasures of calling something "my" and the terrifying thrill of watching the market value and revalue it.

As a result, promoters of cryptocurrencies claim they have invented a new form of property that, unlike traditional assets and securities, can be obtained by anyone with an internet connection, a cryptocurrency wallet and a small amount of starting capital. As Ali Breland explained in a recent article for Mother Jones, in a world where “most of us don’t own junk,” this accessibility is fundamental to cryptocurrency’s broader appeal. For those who are used to being trapped in a vicious cycle of work, rent and debt, buying cryptocurrencies or trading NFTs may seem like a good bet, offering a chance to play the game — if your wits are Keen, you work hard - you may be in control of your financial destiny. This is a new ideological model of ownership that fits our age. Discarding the intermediary symbolism of the family, it promised wealth and independence to those who had the guts to go straight to the market.

At scale, this new financial inclusion program appears to be recreating many of the old inequities. According to a 2021 Financial Times report , while 75% of transactions in the Ethereum NFT market are small transactions under $10,000, 80% of the overall wealth is controlled by 9% of wallets. Most buyers have seen their initial investment fall so far, and the real moneymakers are the “big whales” whose portfolios include diversified NFTs on top of their massive cryptocurrency reserves, giving them a sense of the market Extensive powers for patterns, and greater leeway to engage in deceptive practices such as wash trading . As was the case prior to 2008, the bets of small players are the fuel for the accumulation strategy of elite cartels.

This speculative messy system might not seem like a promising foundation for building a new user-owned Internet, but according to its advocates, Web3 is currently inventing a "cure" for its own ills. Anyway, that's why idealists have a DAO, an online organization that uses cryptography to help its members create, acquire, and manage shared digital assets. One of the advantages of a DAO is to improve the structural inequality of the market, allowing small investors to pool their resources and compete with the big whales on an equal footing - the most prominent public test case of this theory is the purchase of an early copy of the US Constitution Failed attempt . At a deeper level, however, DAOs should provide a new model of collective ownership that enables user-owned businesses to thrive on an unprecedented scale.

Cooperativeism has a long and distinguished history globally as a collective ownership and governance framework for productive enterprises. By adhering to a set of clear and simple principles , cooperatives provide public goods where private business and the state fail, provide services to marginalized communities, uphold workers' rights, and protect the environment. The platform cooperativist movement is trying to apply these methods in the digital economy, an effort spearheaded by deliverymen and taxi drivers who build worker-owned apps to rival an economy dominated by big players like Uber or Deliveroo. Advocates are increasingly looking to Web3 as a complement to the co-op movement, arguing that the former can provide a degree of scalability and quick access to funding that co-ops have traditionally struggled to achieve.

Perhaps the DAO model can offer something to the platform corporatist movement, a space to test new tools for mobilizing group action in the digital space. However, cryptocurrencies and blockchain technology also pose profound risks for anyone hoping to build a truly egalitarian digital community. These dangers are baked into the ideology of the organizations that underpin the Web3 vision. "Cryptoeconomics" is an emerging interdisciplinary field that proposes that cryptocurrencies and blockchain technology can coordinate the self-interested behavior of individual investors through a system of economic incentives. In practice, this amounts to issuing "governance tokens" that signify DAO membership, as well as conferred rights such as access to private discussion groups, voting rights, and a share of any revenue. In many cases, these tokens can also be traded on the open market. The logic of the DAO is that the greater the market value of the token, the greater the potential gain for the token holder - an "incentive mechanism" that supposedly encourages token holders to commit to their decentralized community long-term prosperity.

In the decade leading up to 2008, the democratization of asset ownership had proven to be a scam, used to lure people into predatory debt markets.

But the big lie of capitalist propertyist ideology has always been that it is possible to democratize the privilege of ownership without having to change the political-economic structures through which social inequalities are reproduced. Cryptoeconomics claims to reconcile people’s enlightened self-interest by providing a new set of tools, enabling people to create shared wealth and provide public goods, simply by pursuing the necessity of private accumulation. However, it only makes it non-trivial by subsuming all motives and interests into a purely economic calculation, and by decoupling the question of ownership from the moral, violent and inequalities that ultimately determine who can own what in a capitalist society. Politicization makes this miracle possible.

In practice, the construction of a DAO inevitably requires balancing the incentive structure of the crypto-economy with good old-fashioned centralized governance. This is both a practical necessity (market-based consensus is not actually an efficient way to run a startup) and a reason for idealism. Ultimately, if you want your DAO to serve non-economic goals, like fighting the climate crisis or supporting the work of art groups, the cryptoeconomic mechanism must (citing an influential paper by theorist Nathan Schneider) "be wrapped up" In a political logic, being able to look beyond economic indicators to see human prosperity and the common good." This could mean creating a governing board with veto power, or ensuring the token is fully in the hands of a trusted core of people.

To some extent, all Web3 projects exist in this gray area between cryptoeconomics and more traditional forms of organization. This could prove to be an interesting design space for designing cooperative ownership models to counter the exploitative hierarchies of Web 2.0. Discussions at Web3 are filled with experimental proposals for protocol designs that could theoretically be used to automatically ensure an even distribution of tokens within a community, or to impose transparent governance standards on accredited DAOs. However, while this state of ambiguity can be productive for the community of ambitious programmers, it is also fertile ground for cynics and crooks. At its core, cryptoeconomics promises to resolve the tension between two distinct modes of ownership—privilege as self-interested individuals on the one hand, and public governance as shared goods on the other. In practice, the vague mix of cryptoeconomics and "off-chain" governance strategies can lead to the conflation of these two ownership models, giving rise to systems that promise to create public wealth, while offering the same things you do in Web 2.0 or in general Find anything as brutal and exploitative as the hierarchy.

Fundamentally, the trajectory of many NFT projects suggests that cryptoeconomics is better at incentivizing boostism than building a The long-term work of the application, more than a community. That's exactly what you can see in SpiceDAO's recent acquisition of Alejandro Jodorowsky's treatment of its unrealized Dune movie. This episode is indicative, not because it shows that SpiceDAO "doesn't understand copyright," but because it shows that trying to buy a set of legal rights that might actually allow you to do something is far less flamboyant than the flashy lure of a new wave of investors. Publicity stunts are attractive.

Thirteen years after the Bush regime ended, the "ownership society" feels even more like a morbid joke.

In stark contrast to this is the activity of established IP holders who are entering the NFT space, attracted by the possibility of turning old images and logos into low-energy profits. The most egregious examples of such projects are app-based marketplaces, where popular brands partner with startups to sell digital collectibles, such as the NBA’s Top Shots (which sells basketball video highlights) or VeVe (brand characters like Marvel, Disney, and DC). of indescribably crappy digital figurines). Both Top Shots and VeVe take advantage of the ownership expectations created by the NFT culture to impose extremely strict terms and conditions on their users, violations of which could result in their license being revoked without compensation. Buyers' rights are limited to displaying and resale of their purchases, while the platform and intellectual property holders take a cut of each transaction. Neither app launched with users having the ability to cash out, effectively trapping their money in the marketplace around which the functionality of the apps was built. Here, the rhetoric and technology of Web3 are redeployed to redefine capitalist property relations in the most blunt form imaginable.

On VeVe, the sometimes cranky buyer base is lured by the extravagant promises, from new licensing deals to the creation of a "VeVeverse," often envisioned as a "Ready Player One"-esque metaverse filled with your favorite corporate knowledge property. For VeVe diehards, the promised future isn't just that their assets will eventually skyrocket in value; it's that they themselves will eventually become owners and renters, charging others to view or borrow their properties. Driven by a desperate attachment to this fantasy, these investors do all the hype work you see in the rest of the NFT community, only in this case they represent corporate IP monopolies, and Not a cryptocurrency startup. Essentially, VeVe users are paying Disney for the privilege of being their digital marketing flash mob.

In VeVe's Web3 vision, we see what happens when cryptoeconomic ideology is intertwined with legal structures that actually determine who owns what in our cultural economy. The fact that Top Shots and VeVe have so readily unleashed many of the shackles of encryption is a testament to how easy it is to strip speech from the superficial foundation of encryption. In this version of the digital future, all are paying rent to gain access to the speculator's sandbox, filling our wallets with "property" that confers no real rights but to their real owners For free ad space. Our sole rights - buying and selling - are always subject to punitive terms and conditions. Startups and intellectual property holders sit at the top of this pyramid, squeezing users’ cash while fueling their enthusiasm for the next batch of zombie content ready to roll onto the blockchain.

The collapse of 2008 was a crisis in the concept of ownership in capitalist societies. In the previous decade, the democratization of asset ownership was supposed to "provide security and independence for low-income citizens," but it turned out to be a scam designed to lure them into predatory debt markets. As economist Adam Tooze points out in a slightly different context, the boom in cryptocurrencies over the past decade is a “morbid symptom” of neoliberalism failing to take into account the legacy of the 2008 disaster.

Clearly, part of the answer to our current crisis must be developing forms of collective governance and worker ownership. In fact, the developmental tradition of platform corporatism provides many examples of how these structures should be organized. Web3 is seen as a complement to this movement to a certain extent, but whatever promising ideas it contains have been brought to us in a wave of hype, speculation, and fraud. We need conceptual frameworks to help navigate this frenetic environment; taking a critical approach to the ownership models proposed and implemented in the Web3 space would be a good start.

Far from "solving" the drawbacks of a "ownership society," Bitcoin and other cryptocurrencies reproduce them in an enhanced form, eliminating the tedious business of home and mortgage lending, and giving people the chance to roll their own in a financial casino. Opportunity, instead of having bankers roll on our behalf. Web3 promises to ameliorate the cruelty of the cryptocurrency world by using its tools to create public forms of digital property, but as long as its systems rely on the speculative architecture of cryptocurrencies, it risks peddling a dangerous economic fantasy in which , everyone can be an owner, but no one is owned. We all know what the last time we did this was. ⚪️