How the blockchain will realign incentives to bring about freedom of association and exchange

One of the central tenants of blockchain technology is that it will bring about freedom of assocation and exchange, i.e. a true free market.

What does that mean and how?

From an economic perspective, we are all participating in an outdated system of misaligned incentives between corporations, shareholders, stakeholders, employees, and consumers (credit to block.one and eos team for this initial concept). Regardless of what you call them there are essentially 2 participants per exchange and 2 objects for exchange under the ownership of each respective participant. When you put it this way, it does not matter who the participants are and what they are exchanging. Each participant is only as important as that participant's willingness to perform the exchange based on that participant's own subjective values. Each object only has value based on the value assigned by each participant becoming objective only after the exchange has already taken place. This is why historical prices are limited in being able to predict future prices.

Money is merely a medium of exchange and is merely a means for individual actors to participate in society. The medium of exchange is valued based on the culmination of all the subjective values of all the participants in the global exchange of all human interaction.

However, you have today a medium of exchange (fiat and alt-fiat) designed so that select participants (the banks) can double spend as well as the rule making regulative authority double spending even further to prop up those very participants. All of the other market participants must play by the rules of the free market while other select participants get to play by different rules and then blame the free market when the business cycle attempts to cleanse the waste only to continue the cycle of the monetary regulative authority to double spend even further to prop them up.

The monetary regulative authority participants are attempting to objectify value even though this is fundamentally not possible and only further redirects spending toward wasteful activities that would not have occurred otherwise.

With negative interest rates on the horizon, the value of the free market participant's money is being stripped by not being able to earn interest while being "legally" double spent by the banks to maximize shareholder value instead of the bank's own customer bank accounts.

The corporation:

• Corporations can't serve customers the best product since they must have a short term focus on maximizing shareholder value.

• Corporations can't reward employees for contributing to better products due to a chain of command organization model which comes back to maximizing short run shareholder value many times at the expense of the very products and services that ensure their ultimate survival as a viable organization.

• These organizations are not cleansed from the economic system or forced to cleanse their organizations from the inside but instead are propped up with a government controlled currency.

• The government controlled currency is under the influence of a corrupted political system which is itself under the influence of the very stakeholders of these increasingly dysfunctional corporations.

The Shareholder:

• The corporation is the stakeholder but it is hamstrung by the shareholder.

• Instead of investing in research and development to further develop better products for consumers, in order to compete for shareholders, they either must hoard cash due to systemic risk or they must pay the shareholders directly with dividends to keep them happy. Shareholder equity has too much weight on the decision making over revenue generated by making their customers happy.

• If an organization's shareholders are competing with it's customers, then this is the definition of a dysfunctional organization.

to be continued...