Category: Economy

It’s done so much for human well-being, but it’s far from perfect. Will capitalism as we know it evolve into something new?

By Matthew Wilburn

Nearly 250 years ago, the economist and philosopher Adam Smith wrote The Wealth of Nations, in which he described the birth of a new form of human activity: industrial capitalism. It would lead to the accumulation of wealth beyond anything that he and his contemporaries could have imagined.

Capitalism has fuelled the industrial, technological and green revolutions, reshaped the natural world and transformed the role of the state in relation to society. It has lifted innumerable people out of poverty over the last two centuries, significantly increased standards of living, and resulted in innovations that have radically improved human well-being, as well as making it possible to go to the Moon and read this article on the internet.

A decentralized autonomous organization (DAO) is an entity with no central leadership. Decisions get made from the bottom-up, governed by a community organized around a specific set of rules enforced on a blockchain.

DAOs are internet-native organizations collectively owned and managed by their members. They have built-in treasuries that are only accessible with the approval of their members. Decisions are made via proposals the group votes on during a specified period.

A DAO works without hierarchical management and can have a large number of purposes. Freelancer networks where contracts pool their funds to pay for software subscriptions, charitable organizations where members approve donations and venture capital firms owned by a group are all possible with these organizations.

Before moving on, it’s important to distinguish a DAO, an internet-native organization, from The DAO, one of the first such organizations ever created. The DAO was a project founded in 2016 that ultimately failed and led to a dramatic split of the Ethereum network.