universal basic capital + future of DAOs 💰
ubi vs ubc and crypto experiments on reducing inequality. 674 words.
Recently, there’s been a huge surge of interest in ideas like universal basic income partly because of a realization about automation. Universal basic income has been cited as a means of social justice but also as a free handout of money that could discourage people from working.
The biggest argument for UBI is around the sharing of public wealth.
Essentially, public wealth is created over generations and many of us know that our income and wealth is fundamentally due to the contributions of previous generations much more than what we do ourselves today. If we allow for a private inheritance, then we should also have a public inheritance as a social dividend on public wealth (aka universal basic income)
Universal basic income is a means of providing people with basic security. Good mental health is a byproduct of basic financial security that many people in the world are lacking.
The argument against UBI is quite obvious: giving people free money would only discourage them from working while putting unnecessary stress on government systems.
Crypto is like the testing ground to run experiments to make technology more equitable and fair than previously what was possible with the internet (web2). A more interesting idea/take on UBI is the lesser-known, universal basic capital.
In recent decades, income inequality has grown in most developed and developing countries. The idea of universal basic capital (UBC) is a solution to structural inequality by giving people ownership of assets.
The idea is not so much to act as a safety net (like universal basic income), but as a springboard to be propelled to the heights of better living conditions and a more equal society.
UBI is a subsidy that has limited impact while with UBC, you have a piece of a country’s capital - you are an owner of the future.
Looking at Singapore, as an example - the biggest contributors to the budget are the sovereign wealth funds, which are the savings from the productive assets of the nation (what the nation produces). This means tax is low, incomes are high, and inequality is less. So it's a virtual circle.
The whole idea is that it feeds in a positive way as opposed to a negative way.
I mean why not include everyone in the wealth that is being created?
Currently:
Alaska's social wealth fund, pays out dividends from the state's oil revenue.
Oil created Universal Basic Capital via:
Norwegian Sovereign Wealth Fund
Gulf States Sovereign Wealth Funds
Alaskan Permanent Fund
etc.
UK's Child Trust Fund
children receive an investment account seeded with £250 at birth to ensure every child has savings by their 18th birthday.
UBC has benefits over simply redistributing income: basic capital can serve as a safety net that increases bargaining power, grants the ability to take entrepreneurial risks and focus on long-term goals, and alleviates financial anxiety.
Now the question becomes: how do we get wealth-creating assets to more people?
One way to view DAOs and crypto networks is through the lens of distributing ownership broadly so that the people who contribute work can also become shareholders.
Crypto networks aim for an ownership-control structure that is extremely similar to cooperative enterprises. Stakeholders are generally the consumers or suppliers of the cooperative’s product or service ("community-owned and operated" networks).
A portion of DAO treasury funds can be designated for the DAOs' member bases and invested (for education, healthcare, funding, retirement, etc.) to earn yield over time.
some popular projects using crypto/blockchain to reduce inequality:
Crypto can help to decide the kinds of societies we want to create and the way the economy should function.
How do we change the fundamental dynamic driving wealth inequality and can DAOs play a role in the experimentation of the mass adoption of UBC?
I’m really excited about the future of DAOs working to improve design and structure to balance short-term needs of engagement and acquisition with long-term goals like reducing inequality and solving world problems - overall excited to see how it plays out.
Read More 👇
article on UBC and China income inequality
short video
I’m trying to build a writing habit by writing here every day about things I learn in web3, blockchain, crypto, etc. If you find errors in my understanding or would just like to talk, it would be most appreciated if you’d reach out @_anyasingh