This struck me last week when I was listening to a Bankless podcast episode on Ownership economy with Li Jin. It’s early days, but one of the defining characteristics of Web3 is ownership. I’m not sure who was the first to come up with this, but it effectively frames the progress of the web:

Web1->Read (static sites like the early news media sites)

Web2->Read & Write (Facebook, YouTube)

Web3->Read, Write & Own (this site: Mirror)

I’ll just leave links here for you to explore more about this by Eshita, Him Gajria

In Web3, the creator owns his content, can directly earn from his creation, the platform is decentralized (not owned by any centralized entity), the user can participate in the governance of the platform. All this is made possible by non-fungible tokens (NFTs) which have the ability to ascribe ownership to digital assets. NFTs are on the blockchain and they are programmable too: a simple example is a digital art NFT can be smart contracted such that the original creator gets 5% of every future sale of the digital art (a royalty on secondary sales).

It’s not just the creators, even fans and supporters of creators can have a stake. An early supporter (purchasing the work/part-funded an album) of a music artist could be rewarded with an NFT which gives her a share of the future revenue of the artist or a an entry pass for future concerts. More such innovative models would be possible with the new technology.

In essence, the technology of blockchain (underlying to NFTs and Web3) lends itself to ownership and transfer of that ownership. Koopa Troopa helps us with what is unique about Web3, “In Web 2.0, creators monetize their work via a SaaS model, where they’re paid for a newsletter, artwork, or craft on a regular basis. In Web 3.0, creators monetize through the issuance of a social token or NFTs, with non-fungible tokens acting as digital media ownership.”

It know it is difficult to wrap our heads around Web3 hype, but that’s an ongoing process for me. While Web3 makes progress and I continue to explore it further, I do have my doubts on how successful it will be in democratizing the ownership of assets. But for the sake of this essay, I’m going to presume that Web3 can enable an Ownership Economy so that we can explore this through Marx’s social change theory. In the following paragraphs, I’ll explain why this development is interesting in the context of Marx’s theory.

While most of us would’ve heard about Marx in the context of socialism and communism, not many of us would have had the opportunity to read his theory on social change which is actually more insightful. Here’s a brief of his theory:

Marx segregates the history of human societies into certain stages. Each of these four stages is differentiated by a peculiar mode of production (how value is created in the economy) – which depends on the means of production (the technology to create value). According to Marx, the change in the technology of production was a critical historical marker of change and development of new stages of human society:

1. Primitive Communism or Tribal Society: Refers to the hunter-gatherer stage of human society where the technology of economic production was limited to primitive means of gathering and hunting. Obviously, the means of production were owned by everyone in society, less value accretive, and there was an equal society.

2. Ancient Slave Society & Feudal Society (though they are separate stages, I have combined these two as Feudal Society is a more developed version of the slave society with similar underlying forces of production): Feudalism (and ancient slave-owning) society was made possible through the advent of the new farming technology which was more productive leading to creation of surplus value. However, the means of production included land which was owned by a few (Feudal lords or Masters).

3. Capitalism (was preceded by Mercantilism): Then industrial era technology of steam engine and its successors led to a new kind of economy and society. The means of production transitioned from farming to factories (and Silicon Valley offices). Here too the means of production (factory, software, apps) were owned by an elite who controlled and profited from it. The difference in Capitalistic society as against Feudalism is that one had more opportunities to acquire productive capital assets which was more diverse in the capitalistic society (intellectual capital, intangible assets like software, etc).

4. Socialism & Communism: This was Marx’s prediction for the future of human society where the means of production will be owned by the entire society

One of Marx’s core insights was that the paradigm shifts in society were led by certain transformative technologies (economic means of production). Ironically though, while Marx attributed all previous paradigm shifts in society to shifts in technology, he predicted future progress (to Socialism and Communalism) to be through a conflict between the ones who owned the means of production and the ones who owned only their labor. As per my reading, he did not foresee a new technology enabling this shift, which is counter-intuitive to his own theory of social change.

If you’d read Marx’s theory of social change a couple of decades ago, it would’ve been difficult to imagine a technological advancement that could herald a new kind of society. While the Information Technology revolution transformed the economy and our lives, it did not lead to a paradigm shift from the capitalistic society – it was just that the means of production (algorithms, software) were owned by a new set of elites. There are also technologies like Artificial Intelligence that have high potential to transform the way we do things, but it will not create a paradigm shift in society because these technologies do not fundamentally alter the ownership model and the means of production as compared to capitalism.

Then came Blockchain, which has opened new possibilities that couldn’t be imagined previously. With possibilities for decentralization, ownership and transfer of digital assets, self-governance, this could possibly be a trigger for the next stage of human society. Maybe the past attempts at Socialism and Communism did not work because the right technology was not available yet.

The next stage of society need not be communism, it may be something else far from what Marx had predicted. But if blockchain and Web3 live up to the hype, then that new stage may be coming soon.

Whatever happens, this essay will stay on as an NFT to check if any of what is talked about here fructifies in the coming decades.

PS: I wrote this on Mirror to explore Web3. If you’d like to support my work, you could collect this essay as an NFT. If Marx was writing today, it is possible that he’d have used Mirror to publish them.

While there are others who have explored blockchain through the insights of Marx, I found this research paper to be the most insightful: Karl Marx and the Blockchain by Basu & Gabbay