Steemit is addressing an interesting economics problem
Steemit is addressing an interesting economics problem. I read an article many years ago in the Atlantic about how the GDP fails to account for a lot of the good but unpaid work we do in the economy: volunteer activities, taking care of kids, etc. On the other hand, the GDP accounts for a lot of "bad" things like buying home security systems and paying divorce lawyers. Things people would be unlikely to up-vote. Here's the article if you really want to read it:
http://www.theatlantic.com/magazine/archive/1995/10/if-the-gdp-is-up-why-is-america-down/415605/
The GDP, of course, is just an impersonal summation of all monetary transactions. We call it a productivity measure but it doesn't really give us a sense for whether we are producing good or bad things. It's just things. Anyway, with Steemit and platforms of its ilk (which will surely follow), we not only have a way to measure goodness but we can loosen the transactional rigidity built into the GDP. A crypto-based rewards system provides the mechanism to pay for otherwise free labor and gives us a currency that can float in relation to the value produced.
My simple example is a mom who will (almost) always take care of her baby so she doesn't need to get paid for it. So there's no monetary transaction and it doesn't get factored into the GDP. But moms certainly want to be commended for the job they do. Like everyone, they tend to do better when recognized for their efforts. I'm not necessarily advocating a Steemit for moms but you get the point. There's real economic potential in creating Steemit's for a range of human activities.
Will all of this work? One big question is why a crypto-based rewards system has any relationship to other currencies, but it does. The market has already told us that. The price might be too high (who knows) but I suspect the underlying reason for any price is that we envision an ecosystem of services provided in the Steemit fashion. We also envision a time when currencies like STEEM will be tradeable for other such services or things in the traditional economy. In other words, despite my attitude toward the transactional nature of the GDP, the fact is that currencies exist because things can be purchased with them. I don't know exactly how this is going to happen but we have solid reason to hope.
Steemit is a good test case for some fundamental ideas in economics, not to mention the social sciences in general. The team is to be commended for taking a bold first step.
nice post @bavak, upvote done
@bavak @blackjincrypto
Steemit is my life
https://steemit.com/steemit/@minion/youtube-vs-steemit-enemies-or-siblings
[IMPORTANT] This post covers the Similarity between YouTube and Steemit as well on How to use Steemit and It's OFFICIAL CONTENT RULES.
ugh spambot...
The world is quickly growing tired of the current economic system. As you rightly point out, terms like GDP, which are so freely thrown around to justify economic decisions or point out their successes, are insufficient and outdated.
In the post-depression and baby boomer generations people simply wanted to know that enough money was being made - thus quantitative measurements like GDP worked for them. Today's information generation wants a qualitative measurement - they want to know whether that money is coming from good or bad sources, and going towards worthy or unworthy recipients. Thanks to banks and governments, the flow of fiat currency is all too often shrouded in so much secrecy that this becomes impossible.
This is why blockchain technology is so popular with the switched-on generation of today, and it's why cryptocurrencies are the future. Finally, we have a totally transparent, decentralized record of every transaction ever made that's built right into the currencies themselves.
Psychologically speaking, I can only imagine that the more people have knowledge (and therefore, power) of a currency and its use, the more they will want to use it themselves. A new crypto-based economy is already here, and people are making millions off it right here and now. As soon as it really takes hold of the public consciousness (and Steemit, as a blockchain-based social network, is by far the best means we've ever had of making that happen), governments, banks, corporations, retailers - basically everyone who uses money - will either have to get on board, or get left behind. Gold simply isn't as shiny as it used to be.
At the moment, everything is very muddy, but i just got feeling that we'll break thru all barriers and STEEMIT will stand up close with the Giants like Reddit and Twitter.
Not muddy. Just beta. :-)
Excellet post!
"when currencies like STEEM will be tradeable for other such services or things in the traditional economy"
How awesome would it be just to send steem dollars to "blizzard" with memo "2x Overwatch" and receive it instantly on your email or the next day outside your front door.
What's a "good" of "bad" thing?
Whatever I can manipulate the masses to believe is positive or negative at a particular point in time?
Steemit doesn't give you an ability to measure goodness.
It enables you to measure the inclinations of a minority of influential users.
Great question and, unfortunately, I don't have a great answer. I think, however, that an economic value judgment produced in a smaller community that creates its own currency is more accurate than, say, a central bank doing it on the basis of aggregate transactions for the whole economy. And, in the case of blogging, the central bank would traditionally not even consider it economic activity because it is unpaid. Can the smaller group be wrong? Of course. Can they be controlled by influential individuals? Yes. All human groups can have these flaws. The model here is still being tested but it looks like progress and decentralization is usually a good thing.
>The price might be too high (who knows) but I suspect the underlying reason for any price is that we envision an ecosystem of services provided in the Steemit fashion.
No. Price is dictated by traders in the short term. Human clairvoyance isn't that strong, neither are there enough flush gamblers.
Only time will tell, but certainly we are all on a great path. Keep marching
I like the idea behind your post. Steemit is designed to reward good behaviors that are under-paid by the current economic system, based on the value they provide to the community.
Any thoughts on this? https://steemit.com/steemit/@timcliff/steemit-lifetime-recruitment-bonus-how-rewarding-recruitment-can-help-grow-the-steemit-community
Yes, thanks, I replied in your post as follows:
"Very interesting. Providing recruitment rewards is an example of how a Steemit economy will, over time, evolve toward the provision and compensation of a whole host of value added services."
Awesome, thanks!
I don't know why GDP should be tied to anything other than the total spending within a country. It has nothing to do with wellness.
I see what you are saying about Steemit though. But I just don't think it's relevant to the GDP - which is something very specific.
I think GDP is conflated with standard of living. It even appears in indexes which try to measure quality of life in various countries. But as you indicate, it shouldn't be used this way. By having a platform like Steemit, where value creation and rewards are closely linked, the measure of that value becomes much clearer. It can make possible a future GDP calculation which accurately describes quality of life as judged by real people.
I think you are looking for Human Development Index (HDI). GDP is correlated with standard of living, yes, for obvious reasons. But it is HDI that defines social progress. No serious index will confuse GDP with standard of living. They are two different things.
There's a clear correlation, of course, but not a conflation. You can see here - https://sites.google.com/site/csifinalprojecthappiness3/gdp-vs-hdi
I'd appreciate it if you modify your post to reflect this fact. :)
I agree with your perspective on Steemit though.
Thanks for the link, good material, and a very useful distinction to make. Btw, I'm also a big fan of the Hans Rosling view of the world.