Last week Jemima brought us the story of Mintme.com, a crypto platform that hopes to help people fund themselves “for free” by allowing them to create a token that represents their own selves or a project that they have created.
The idea here is that an individual can raise money by selling a token representing themselves, but also — somewhat more worryingly — draw additional value from its trading on the secondary market. So, hypothetically, if your token is highly valued, you can afford to dilute yourself to issue MOAR coin, generating an income.
Mintme.com’s promotional spin presents all this as wonderfully empowering: “When you create coin or create token [sic], you become an owner of your own financial future.”
But is it really?
As we noted in response to Jemima’s post, the last time people became tradable assets it didn’t work out so well for the people concerned.
Alas, learning from history was never crypto’s strong point. It, to the contrary, is a market that wants to operate entirely without inhibition, even if that risks, on occasion, reviving a really bad idea like, err, indentured labour.
To that end, a not dissimilar concept came to our attention on Monday in the shape of BitClout. The system aims to (our emphasis):
According to the pitch, BitClout will allow anyone to reserve a profile of any living person, which doesn’t even have to represent the person doing the reserving, and to issue tradable tokens off the back of it. This allows you to trade someone’s actual reputation. So, if their reputation takes a knock because of a scandal, it would be reflected in the market price of their profile coins, or vice versa. (Just consider the market for Meghan Markle tokens right now.)
But is this sort of active trading in other people’s worth, voluntary or not, really ethical?
Seems not to be, right?
A human-token enthusiast, however, might argue that people already sell their own selves in the market via the prices they command in the form of wages.
And this would be true.
He might also argue that libel law, which regulates the impact of scandal on anyone’s reputation, is already famously linked to the notion of whether one’s earnings are actually impacted by the defamation in question.
Furthermore, it would be hard to deny that corporations don’t already speculate on the mispricing of people’s current wage capacity versus their longer-term wage-earning potential.
More is afoot than a simple issue of ethics.
Think of graduate schemes, or apprenticeships. These represent a quid pro quo arrangement that favour corporations massively. The employee receives a discounted wage (or even financial advances or sponsorship for academic learning) in the here and now, on the understanding that the company will invest in their skills and usefulness. The underpricing is in some cases dramatic because it is generally viewed the company is taking a risk that the employee might not have the potential they believed them to have, or — worse than that — could walk away from the corporation once their training has been completed.
As it stands there is no good way of fairly pricing that discount. As a result, one could argue the graduate market is exposed to a market-for-lemons-type dynamic. All graduate labour is underpriced upon entry into the market because there is no guarantee a graduate will fulfil their expected potential or stick with the company if they do.
That works out really badly for those graduates who, upon receiving a good chunk of skill, do not achieve enough of a superstar-ranking to make them attractive to bids from competitor employers, but who are skilled enough to deliver major productivity gains to the corporation they originally entered.
This type of worker, arguably, represents the bulk of employees. The underpricing of their wages, meanwhile, gets all the greater as other frictions that make leaving or losing one’s job more complicated manifest themselves (such as having a family, getting a mortgage or not being able to afford healthcare).
This initial graduate/entry-level mispricing is a big problem for human liberty, because it’s a key contributor to excessive indebtedness.
By not being able to command a salary that can afford the lifestyle that the population’s collective productivity has the potential to provide, these individuals are de facto forced into debt peonage to achieve it. All of which transfers a big chunk of power to corporations by reducing the capacity of employees to walk out if they’re being treated badly or if they’re being underpaid.
And in some ways it then becomes a matter of semantics whether this sort of arrangement is really all that different to our common understanding of indentured labour or slavery. The only real difference is that, like a conventional Ponzi scheme, we the victims don’t know we’ve been subjected to a scam until it’s too late.
So, yes, in the most cynical sense, the theory that the slavery market potentially never went away but rather reinvented itself as the market for mortgage-backed-securities, is not entirely ridiculous.
The question is, would making the arrangement more transparent — i.e. making everyone explicitly aware they are selling a chunk of their future earnings power in a tradable market open to speculation and financialisation — make that situation better or worse for the common man?
In the dark crevices of internet conspiracyland, a strange little theory pertaining to a similar type of human trafficking in everything but name has been percolating for decades. One of its chief propagators is a conspiracy theorist called Jordan Maxwell, whose most notable contribution to the alternative fact canon is the entirely baseless idea that every birth certificate in the United States is actually a stock security.
The theory dictates that the market takes daily bets on the value of your securitised soul, and we, the indentured masses, don’t even know about it. And the reason we are ignorant of it (and forgive us if we haven’t got this entirely right; these sorts of videos can be quite convoluted) is because allegedly we don’t even get the original of our own birth certificates. What we own is merely a copy. It’s all a giant conspiracy by the powers that be to repress our freedoms. Get it?
But while the details may be bonkers, the broader argument isn’t completely meritless.
It is not wrong that the stock and currency markets of any nation are a reflection of the collective value of all its productive inputs, one of which (alongside natural resources and physical capital) is its human capital, both muscle and intellectual. But progress, via the abolition of slavery, has ensured that we as civilised societies have also devised strict legal restrictions regarding how that human capital can be exploited. A key factor determining the legality of human capital is what constitutes forced labour in and of itself.
Overall, most lawyers guide that some level of coercion or deception “which goes beyond the ordinary” must be at hand for someone to be considered a modern-day slave.
Except this feeds somewhat awkwardly into another fringe theory, which argues that what constitutes “ordinary” is no longer a reflection of real freedom in the traditional sense.
The argument stems from what has become known as the Sovereign Citizen movement. It’s relevant because it is strongly supported by many libertarian-type thinkers who also back bitcoin and the wider crypto market. A key proponent was also Lord William Rees-Mogg, father of Britain’s current leader of the House of Commons and Lord President of the Council: Jacob Rees-Mogg.
At the heart of this theory lies the notion that “we the people” have over the decades been dispossessed of our democratic freedoms and our earnings because of the state’s growing monopoly on violence and its associated power to tax us unjustly. Most of us, one can only presume, are blind to this because we haven’t really thought hard enough about the word-trickery that over time came to redefine slavery for the modern age.
But the movement also believes that the days of government oppression are probably numbered because a new power, that of the internet, is initiating a sovereign revolution which will liberate individuals at the expense of the 20th-century nation-state.
Rees-Mogg (senior) even co-authored a book in 1997 that predicted that “when the state finds itself unable to meet its committed expenditure by raising tax revenues, it will resort to other, more desperate measures. Among them is printing money.”
Presciently, it also noted the following:
Once governments lose the power to tax effectively (because it will be ever-easier to hide value offshore in newfangled digital-bearer securities), the book predicts the state will have no choice but to turn nasty.
You get the picture.
It’s important, we think, to frame the tokenisation of people and their reputations in the context of the brave new world imagined by the sovereign citizenship movement. Their view is that eventually individuals will be faced with the unappetising choice of either being totally free but entirely without state protection, or entirely protected by the state but totally enslaved by its system.
How well a common man might fare in such a world could then come down to how such a human token — if it were ever to become a thing — were to be treated on a balance sheet. Debt, equity or something else.
Debt-based monetary systems are famously hated upon by libertarians who see all debt as intrinsically bad. They see equity-backed system as far healthier. But if tokens are considered equity, that gets complicated when you enter into the realms of personal loan-making.
Can you really sell a chunk of equity — or even a portion of future earnings capacity — without exposing yourself to the risk that you may never be able to buy yourself back? Or worse, to the notion that you may become someone else’s property?
The advantage of debt is that if one needs a loan to elevate oneself through the social hierarchy, there’s at least a finite aspect to the lender’s “bondage” over you. What’s more, there’s always the option to default (even if doing so means a hit to your credit reputation and thus also to your capacity to take on new loans). Though, of course, if you are forced into excessive debt it could be argued that there is little difference.
Perhaps, like with bitcoin, the real value of tokenising people comes not in trying to change the inherent nature of the current system, but in making its true form transparent to all its participants. At least then the market for your labour might be priced fairly?