Cooperation makes the world go round.

Following on from my last article, I’ve done a bit more reading and thinking and feel there is more to be said.

Tokenisation is in many ways the ultimate cooperation. Things have to fit together and be agreed before it works and that is exactly what happens. As any economist will tell you it is the cooperation to produce something that benefits everyone. In the good old days (really?) everyone in a village did pretty much everything until one day a young chap who was particularly good with a hammer and anvil became the only person making nails, because he made them faster and better than everyone else. Then the chap who milled his flour better than the rest ended up only milling flour for the village and so on. The nail maker and the miller didn’t have to grow wheat any more because they could buy what they needed with the money they made from their expertise. As a result, everyone else could let go of making nails and milling flour and suddenly they had time on their hands to DO something as opposed to merely surviving.

As things stand, we have everyone opposing everyone else and the body politic is immensely fragmented and fractured. It is very unlikely that much will get done in the new few years as things stand. That in itself may be a good thing, as businesses might be able to catch their breath and bed down new practices and legal requirements. But I wouldn’t put it past Ministers thinking up a whole new raft of regulations because that makes it look as if they are DOING something. They are, but in general it’s messing everything up yet again.

The years and years we take to even begin infrastructure projects is truly disheartening. I was reading the other day about not one but THREE long bridges that had been built in Scandinavia within the time that we were still contemplating building ONE. That’s contemplating not doing.

Tokenisation makes cooperation easy. If you create 100 tokens for something that owns a building each token represents one hundredth of the value of that building. In many ways Time Share is tokenisation – very clumsy and expensive but defining what each person owns.

Vlad Tenev – not a name on everyone’s lips but hey – is the CEO of Robin Hood, one of the largest retail trading platforms in the world. They’ve just had a pretty rubbish set of results (profits down 9%) as retail traders become both fatigued and dealing with other price increases. He has made very clear what crypto is really about. Actually, it isn’t crypto per se. It is no longer about boosting crypto prices or trying to second guess what the price will be a week on Tuesday. It’s about taking crypto architecture and applying it to real world assets, situations and utility. As he says, “That’s why we care so much about tokenisation. We are at the very beginning of what is going to be a tokenisation supercycle.” Excuse me for Anglicising tokenisation.

I’m still astonished how little has been done in many areas. For example, tokenising shares in businesses ought to be a no-brainer. Once on the blockchain you don’t need all the hoo-ha when you buy and sell. You own the stock on the blockchain. I have cash (probably a stablecoin) on it too. You send the shares to my wallet and I send the cash to yours. That’s it.

Good economics IS cooperation. What it is NOT is singling out one section of society for special treatment, either good or bad. People are willing to increase taxes on the wealthy, and apparently three-quarters of Londoners believe a cap on rents would make them better off. It would not. It has been proven time and again that what happens is that there are fewer and fewer properties available and the prices and/or rentals go up. What economics does is tell you how to make the cake bigger. If you offer a bigger bit of cake to a section of society, they will vote for you. What that does is alienate those who don’t get the extra cake and that is exactly where we have ended up over the last few years.

There are always opposing sections in any society. The Nazis grouped people into races and basically took everything to themselves. Marxists believed the world was populated by Capitalists and Communists (sort of) and vied to get as much into the Communists hands as possible. The common theme here is an interfering higher authority which stops effective cooperation. It usually ends up as coercion.

Neither of them worked WITH that miracle, the price mechanism as opposed to against it. That in itself regulates what people get. So growth means making sure there is always enough to go round and that’s what it does. Trade and exchange exist to move goods and services around to where they are most wanted and cooperation makes that both possible and viable.

I’m sure you all remember there was always someone in your class at school that everyone hated and picked on. The same applies to grownups in settled groups. We all need someone to hate (and that’s a terrible thing to say) but it enables a group to become more cohesive – with the excluded on the outside. Governments specialise in economic protection and limitation, however ill-advised and self-defeating. Even those who do the most to limit growth recognise that we ALL benefit from a bigger cake (i.e. growth) As Ludwig van Mises said “In society each participant sees the other partners success as a means to his own.” It’s one of the reasons the Americans are so successful. In a land where every farm boy can become President and success is lauded for its own sake, that farm boy adds not just to his own wealth and success but to towards myriad others as well.

It would be wonderful to think that at this point where some sort of actual reset, as opposed to fumbled words, is essential and possible that something good might come out of it. I’m not holding my breath.

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