RE: Steemonomics: Competition, Cooperation, and Complementarity
It's really neat how you juxtaposed economics and ecology! However, there are a few issues. You say that resources can't be efficiently allocated without prices... but then go on to praise Steem.... where we "up-vote" content.
A computer has a price tag. And a price tag is a value signal. Disaster relief, on the other hand, does not have a price tag. The Red Cross doesn't sell boxes of disaster relief with price tags on them. It's entirely up to you to decide how much, or little, money you donate to the Red Cross. Although I'm sure there's some lower limit. Even though the Red Cross doesn't have price tags... it does have a value signal. The amount of money that you decide to donate to the Red Cross helps to create its value signal. The more money that people donate to the Red Cross... the brighter its value signal.
But with Steem... we're not talking about spending... or donating... we're talking about voting. I clicked the "up-vote" button for your story.... and what happened? Was money withdrawn from my digital wallet and deposited into yours? If so, how much money did I spend and why call it voting? Why not call it spending? But if it truly is spending... then why can't I decide how much I spend on your story? Right now I don't have the option to "up-vote" your story again. If I click the same button it will remove my "vote".
So as far as economics is concerned... Steem is a super hot mess. Why in the world would anybody want to combine voting and spending?
If we actually are creating value signals here on Steem... then they will be really inaccurate. Which means that resources will be inefficiently allocated. People will waste their talent and creativity writing about less valuable topics.
The efficient allocation of resources depends on accurate value signals. And accurate value signals can only be created when the amount of money that people spend accurately communicates/reflects their true valuation.
Regarding diversity... humans are naturally super diverse. Which means that demand is naturally diverse. We can see this in the diversity of the supply in the private sector. Diversity is a wonderful thing because it helps humanity hedge its bets against constantly changing circumstances.
The problem is that we don't see the same amount of diversity in the public sector. Which is only logical because we don't have a market in the public sector. We have a command economy in the public sector. We could easily create a market in the public sector simply by allowing people to choose where their taxes go (pragmatarianism). We'd have a market in the private sector and a market in the public sector. Whichever market created the most accurate value signals would win.
Thanks.
You raise a valid point. Indeed, the Steemit system of voting and rewards does not constrain the consumers' expression of their preferences as much as a true market economy in which currency (or real money, but that's so rare these days) is the medium of exchange. This of course means that signals conveyed by voting on Steemit will have more noise than the signals conveyed in a free market economy.
Still, the value of a vote depends on how much Steem Power the voter holds, and frequent posting or voting temporarily reduces the potency of ones votes. In any case I think its interesting that Steemit at least rewards the posting of content valued by other participants, more so than for example Facebook, where the only rewards are comments, likes and shares (popularity).
The more popular a Facebook post is, the more "likes" it will receive. So we can quickly discern how popular a post is simply by looking at the number of times it has been "liked". What if Facebook gave more weight to the "likes" of the people whose posts were the most popular (received the most "likes)?
Elizabeth Warren is a congressperson. Why? Because she received more votes than her opponent. In other words, Warren is a congressperson because she was more popular then her opponent. And because Warren was more popular than her opponent... the weight of her vote in the public sector is far greater than the weight of our votes in the public sector. We don't have votes in the public sector.
Warren was rewarded for her popularity. The size of her reward (power in the public sector) provides an incentive for people to be just as popular as Warren.
What about Steem? Does Steem incentivize the creation of valuable content? Or does it incentivize the creation of popular content? I don't know how it can possibly incentivize the creation of valuable content. The only way to do so would be to allow people to spend their money on content. We don't have that option. Therefore, Steem incentivizes the creation of popular content. Because... there's a shortage of popular content? That's the problem with society? The problem with society is that "politicians" (broadly speaking) need even more power and influence?
There's nothing inherently wrong with votes or "likes". The issue is when we can't compare the popular answer with the valuable answer. When we can't see the valuable answer... then society is guided by the popular answer. I don't want society guided in the most popular direction. I want it guided in the most valuable direction.
I certainly want the politicians to have less power, not more. Steemit, by providing a free and decentralized forum, will I think do more good than harm, maybe even a great deal of good.
Individuals do routinely pay to publish and advertise, which does effectively promote ideas and products. As far as I'm concerned that is as it should be.
I'm with Hayek in disliking the term 'society'.
You can dislike the Steemit system as much as you please. I only wonder why you bother to participate if you find it so undesirable. Why not start a service selling space for publications an ads?
I really don't see how Steem is more likely to do good than any other similar website.
Why did Hayek dislike the term 'society'? Which term did he prefer?
Well... I'm just disgruntled with Steem because I got tricked... The Economics Of Steemit. I was hoping that it was fundamentally different from all the other places where I write stuff... but it really isn't. It's just another popularity contest. You have to dig and dig and dig to find valuable content.
Your story wasn't bad... but you're definitely not striking at the root of the problem. Which is a shame because you seem bright enough. The root of the problem is that people don't understand the importance of accurate value signals. Mark Perry recently posted a decent article about the importance of accurate value signals. Just now I posted a blog entry trying to persuade a respected journalist about the importance of accurate value signals.