On Web3, Collaboration and Economics

Is competition between humans counter-productive to achieve a long-term optimum?

I believe that acting based on the acknowledgement of our interdependence as humans and our reliance on a natural equilibrium offers better and more sustainable outcomes than acting upon the simple constraint of an independent optimisation of self-interest.

Web3 gives a new platform thanks to the cultural, economic and governance evolution happening on decentralized computers world-wide.

Competition

A description of a collaborative economic model is not complete without a description of its opposite. Competition is a rivalry between two or more parties striving to achieve a common goal that cannot be shared. It is a major tenet of traditional economic models. Humans commonly compete for resources although when their context is static and repetitive, competition degenerates into rivalries that arise over the pursuit of wealth, power, prestige and fame. Arguably, competition within humans is a consequence of a lack of education, lack of technological innovation and societal stagnation.

I am not an opponent of competition in general, quite the opposite. Competition is a powerful analytical tool that allows us to understand the pros and cons of strategies and their interactions within various contexts. Genetic algorithms are a prime example of competition as a tool leveraging a strong mathematical foundation. I do on the other hand believe that competition within humans is detrimental to our species.

Traditional Economic Models

Throughout the general literature of economic models, including competitive, non-competitive and cooperative models, there is a common view that consumers and producers are competitive opposing forces within the market construct. These economic models are separately linked to various ideologies spanning across the political spectrum ranging from capitalism to socialism to communism. Although these ideologies are usually interpreted as opposing, they have a common thread, as stated above, that economic models are aggregated transactions between antagonistic forces.

I believe this common view, that permeates our limited understanding of economics, in which suppliers and consumers are opposing forces, is the root of many of the societal issues that we are facing today. Ask yourself this, imagine a group of highly educated and trained individuals are sent off to colonize Mars, at what stage would it make sense for these individuals to compete against each other rather than collaborate? Is there a tipping point for communities to start competing after a period of collaboration? And if so, what is that point and when does it occur? I do not think that this tipping point exists and that collaboration should be in the fabric of our dynamic.

Traditional Governance Models

Most of our traditional systems of organization and governance, including political systems, were designed during a time when our ability to enforce rules and agreements was constrained by human execution. Systems relying on human execution are naturally plagued by a high degree of opacity, lack of transparency, the need for human interpretation and obviously the probability of corruption.

The advent of decentralized computers able to execute rules and agreements within a trustless context, i.e. blockchains, changes the aforementioned constraint of human enforcement and therefore changes the playing field allowing us to design more transparent, adaptable and suitable governance systems.

Blockchain systems allow us to understand subtle yet meaningful nuances in definitions of less popular and arguably defunct models like Anarchism. The name Anarchism is derived from the Ancient Greek word anarkhia which means “without ruler”. Thanks to decentralized computers, distinguishing between not having a ruler and being without rules is now contextually relevant. The existence of a ruler or a centralized entity that designs rules is not a prerequisite for the existence of a functional system with enforceable rules. This shows that older organizational models could potentially be adapted to become functional systems within this new age of decentralization and trustlessness.

Transparency and Collaboration

Does it make sense to compete when participants have perfect information about the current state of the market, i.e. the state of the other participants?

In economics, perfect competition is based on the existence of perfect information of historical events, not the perfect information of the current state of other participants. We believe that competition is based on the lack of transparency or an unequal availability of resources.

Business models should be transparent, open-source where applicable, composable and integrable. This could mitigate the risk of competition because most products and services are aggregations of multiple modules. If these modules (composable) are available to the rest of the market, other participants can use and pay for the modules they need (integratable) and only focus on enhancing the feature they have expertise in instead of recreating the entire value chain, perhaps making the initial value chain redundant unnecessarily and being wasteful.