Nicolas Berggruen is chairman of the Berggruen Institute and publisher of The WorldPost.
One of the biggest tech stories of 2017 was the explosion of public awareness about cryptocurrencies, fueled by rocketing prices for two of the leading cryptocurrencies, Bitcoin and Ethereum. Many pixels continue to be spent speculating about whether these prices are a bubble, whether their rise heralds the disruption of traditional state-backed currencies or whether the real driver of demand is the need to provide liquidity for black markets.
But the frenzy around Bitcoin obscures the fact that blockchain, the technology underpinning cryptocurrencies, is a much more general-purpose technology, one that holds the potential to revolutionize far more than just currency markets. The revolutionary potential of blockchain lies in its ability to securely inventory, track, subdivide and transfer wealth over the Internet. In a nutshell, what the Internet was to social media — the core enabling technology — blockchain is to the possibility of a true sharing economy.
From China to the United States, from Europe to Latin America, and regardless of political system, capitalism has conquered the world. High productivity growth has meant that between 2003 and 2013, for example, global per capita income doubled. The result is a world rapidly getting rich enough to take care of everyone.
However, the question of how to fairly distribute all this wealth remains unresolved. One of the biggest challenges facing contemporary high-tech, globalized capitalism is the relentless rise of inequality and the lack of steady, well-remunerated employment, in particular for people without technical skills. Globalization grows middle classes in China and Mexico but costs jobs in America. Technology, so far, has mostly made inequality worse.
The arrival of artificial intelligence and robots threatens to exacerbate these trends. While this second machine age promises enormous growth in productivity, a 2016 report by the International Monetary Fund argues that the robot revolution may have “profound negative implications for equality.” Under our current political-economic configuration, lots of current jobs will be eliminated (McKinsey predicts as many as a third of all current jobs could disappear), and the benefits of productivity gains will be captured by the handful of companies building them. The question comes down to ownership: If capital owns the robots, even as their use increases labor productivity, the returns will go to capital; the workers (those who are left, in addition to those displaced) will lose out. Even if the displaced workers find new jobs, inequality will deepen.
What we’ve done historically in the face of inequality is to allow it to rise on the production side and then tax the rich in order to redistribute. Unfortunately, that system may no longer be adequate in the face of the second machine age. Some of the proposals for dealing with this oncoming challenge, such as universal basic income (UBI), don’t really work: they perpetuate the makers-versus-takers distinction, and while they provide an income floor, they do little to deal with inequality. A world where the vast majority of people subsist on some meager basic income while capital owners roll in the profits is not exactly aspirational.
What’s needed is a system that ensures that everyone can consider themselves a part of the future by enjoying the benefits of economic growth, simply by virtue of being a member of the social collective. Here’s a proposal: Why not give a share of everything to everyone within a society? For example, imagine a society in which a third of its goods are owned by society itself, a third is owned by workers and a third is owned by capital — so that everyone has a share of everything.
In other words, instead of re-distribution (which is really post-distribution), we should be talking about pre-distribution: instead of ameliorating inequalities through the tax and benefits system once they have occurred, lower inequalities by making everyone a stakeholder, putting everyone in the same boat and endowing everyone with access and dignity. This model would continue to foster innovation and investment while giving everyone a stake in the future.
Fundamentally, pre-distribution proposes a moral economy in which every citizen is due and is given a “share” of a country’s income and productive capacity from the start. Pre-distribution is no unrealizable utopian idea. In fact, pre-distribution systems are already in operation (at a small scale) across the globe. In Norway and Alaska, for example, every citizen gets a cut of the profits that come from those states’ bountiful natural resources. This moral understanding of a rightful share has so far been mainly utilized with mineral wealth. But applied to the fruits of our high-tech economy, it suggests a radically new sort of sharing economy. Digital wealth can be thought of as the oil of the 21st century — except now it is possible to generate this wealth everywhere, not just where the minerals happen to be underground.
The idea of the sharing economy has so far come from companies like Airbnb, Uber and Lyft and has been controlled by venture capital-backed private corporations. Here’s where blockchain comes in: it provides a technological mechanism for enabling sharing. At its core, the technology of blockchain is a mechanism for securely keeping track of information, for example about ownership and transactions. Rather than storing the information in a central location, blockchain makes multiple copies and distributes them across all the nodes of a network. Each transaction is propagated across the network at essentially zero cost and with total transparency.
This capacity has profound implications for enabling an authentic sharing economy. For example, each new robot in an autonomous vehicle fleet could be fractionally owned by every member of the community in which it operates. Every time someone purchased a ride with one of the vehicles, rather than the income only going to a private company, it could be distributed to everyone in the community.
This capability makes blockchain a potentially powerful accelerant for ensuring that everyone can own a share of economic goods. Instead of trying to make up for technologically driven job displacement via UBI, blockchain makes it possible to address inequality at its root, on the production side. Instead of waiting for the inequality to happen and then addressing it via a universal basic income, we can instead pursue the idea of a universal right to intellectual and capital goods — a universal basic capital.
A lot has to happen politically to make this work. But by making it possible to realize the original utopian promises of the sharing economy, we would be enabling new goods in the economy to be fractionally owned by every member of the community. Using blockchain to enable such a distributed, democratic ownership structure could give everyone a stake in our roboticized future, instead of deepening inequality and political conflict.