Prosperity for the neglected, ignored and forgotten

(This post was originally published on October 21, 2015 and was republished on my new blog)

The World is Flat. Pythagoras assumption that the world is spherical is erroneous, Eratosthenes calculation of the Earth’s circumference is based on a methodological fallacy and Magellan’s trip around the globe was orchestrated by the Spanish crown in order to retain its upper hand over the archrival Portugal

…well, not quite. Our world, of course, is spherical, Eratosthenes calculations are only 16% off the real measures and conspiracy theorists will be silenced after looking at the factual proof of Magellan’s voyage around the globe in 1520.

What is implied with the argument “our world is flat” is the fact that barriers, limitations and restrictions have been erased in order to permit a more frictionless interactivity, connectivity and transportation between humans. This flattening is the output of the symbiosis between the great flattening forces (economical, technological and cultural). Humans have progressed, or lets say evolved, phenomenally since our modest beginnings as hunters and gatherers with sticks and stones. Today we live in a society where communication and connectivity goes beyond our exosphere, where information is able to flow freely to (nearly) everyone and where opportunities are only limited to ones imagination. In short, it’s an amazing time to be human, and it’s only getting better with more technological and medical innovations.

But sadly, the majority of people don’t have access to this progress and the opportunities it brings within yet. Nearly 1 billion people still struggle to survive on $1.25 per day, 2.5 billion people still lack access to adequate sanitation and education is still a largely unsolved problem in developing countries. So much for global connectivity when not even the basic needs are covered for the majority of our species.

Even though the numbers of the poor are still absurdly high - they have actually been on a consistent decline for the past few decades. The poor are better off today than they were ever before - all thanks to the great flattening forces.

The History and Effects of Flattening

Barriers shut off light that is vital for growth, progress and prosperity. They drastically restrict us in nearly every aspect and only serve to protect the pride, intentions and the privileged positions of a few who are in power. Humans have been building and eradicating barriers for millennias - and sadly, we are sometimes diligently building.

The two most important paradigm shifts of our society were our progress from hunter and gatherer to agricultural to industrial societies and the invention of money. The former enabled creativity by freeing up human resources; the latter allowed us to trade, invest and save - thus, create wealth. Both of these developments progressed our distinction from animals, but far more important: they made specialization (division of labor) possible.

Specialization is the fundament on which creativity, innovation and human progress are based on. It frees up humans of unnecessary tasks and permits them to focus on those tasks that are to their liking and of their skillset. By making it possible for humans to specialize in their respective domain we get experts who, through collaboration with other experts, can pool their resources and knowledge to create fascinating new inventions that benefit the others. Division of labor was, and still is, one of the most effective forces in eradicating barriers to flatten our world.

The most known form of division of labor in today’s time is outsourcing. Delegating work to other teams, who possess distinctive advantages over ones own capabilities, enables more variety, higher quality, faster production and cheaper prices for products and services - which greatly benefits consumers. This delegation provides work to those who were previously suppressed in their economic and personal freedom by imperialists and to those who were neglected during the Industrial Revolution.

In order for division of labor to succeed we need unified systems, standards, protocols and agreements that greatly eradicate barriers between countries, cultures and groups and thus enable a more frictionless flow of information, communication, collaboration and trade. By making it possible for anyone to collaborate with anyone and for anyone to acquire any publicly available information (especially educational material) we greatly reduce the gap between developed and developing countries. Flattening creates new opportunities that are able to be seized by (nearly) anyone.

TCP/IP is the most important protocol invented in the past decades as it enabled us a crucial aspect for the connectivity of our modern society: the frictionless flow of data (and thus, information). This not only made global communication possible, it also allowed us to share information and more notably, knowledge with anyone. The barrier for education was drastically lowered. Today anyone with internet access can acquire accurate and plenty of information on various subjects and teach themselves anything. We are still at an early stage in this new “knowledge for anyone” development, but with the establishment of more, free online educational platforms we truly empower individuals and open up new opportunities to participate in our global economy.

Outsourcing combined with protocols and trade agreements permits one of the most important effects of flattening: prosperity*.

For one, flattening makes it cheaper for consumers to purchase goods and services, which in turn provides them with a surplus of money (which they can then save, invest or use to purchase more goods). The Flat World effects (such as outsourcing) of course also mean more work opportunities for those who didn’t have them before. This has lead to the rise of Mexico, China and India who today are strong and powerful economies thanks to their past (and present) as the “backoffice” and “workbench” of the Western World.

One of the most recent developments in flattening, and likely the most significant one, was the flattening of innovation. The dotcom haze required young Startups to raise money in the dozens of millions in order to just get started. Money was required for expensive proprietary software, for server infrastructures, for development and for advertising. Today, a fraction of the money in the 90’s is required to launch a Startup. With new innovations in terms of communication, connectivity, development and publications we have made it easy, fast and cheap for innovation to happen and for entrepreneurship to be pursued. The flattening of innovation is still in its early stages, but once it’s running at full steam we will see a drastic improvement both in terms of quality and speed of release of new inventions. Flattening is a cascade

In short, a flat world enables people to create and accumulate wealth, it opens many new more opportunities in countries that have never had such before and it helps in creating a more equal and interconnected world.

The next Step in Flattening the World

The gap between rich and poor, privileged and disadvantaged and the educated and uneducated has been greatly reduced on a global scale (though in some cases, the gap sadly increased). In the past few decades we have seen the flattening of education, of communication and connectivity, of work and collaboration and most importantly, of innovation. Even though we have made huge leaps forward in the century, we do still have barriers to eradicate in order to achieve that one true goal of an equal and fair environment for everyone.

The one sector that is long overdue to innovational progress is the finance sector. No sector has more importance on human development, yet is so reluctant to innovation, than our finance sector. The sad truth is that most of our finance behemoths are too busy playing the zero-sum game of trading with ever increasing (both in quantity and complexity) financial instruments against themselves, and those they are supposed to serve.

Innovation in today’s finance sector is the invention of a new, complex trading instrument that is able to bypass the laws and regulations of the SEC in order to sell dogshit disguised as gold. Such behavior is greatly rewarded by the industry and if things go wrong, the thieves are rescued and put back in their position to craft new “solutions” that succeed in deceiving and stealing from others to fill their own pocket.

This leaves us to no surprise that more than half of our entire population is underbanked or unbanked. With no access to capital, with no way to save, to invest, to borrow, to accumulate wealth we completely ignore a very powerful equalizer force and destroy the dreams of wealth, prosperity and growth of economies we classify as “developing” and “least developed”. One may ask if the pursuit of economic and social growth from developing to developed economy is damned for eternity?

Where is the innovation? Where is the progress? Where is the change?

It is apparent to all of us that the majority of the current banking sector shows no interest to build solutions that help the unbanked. In many cases they actively fight and suppress innovation in order to retain their power over our finances (a prime example being M-Pesa in Kenya, which the existing banks actively fought in legal battles). Who doesn’t want to fight the inevitability of becoming obsolete?

A new, disruptive and unstoppable solution needs to emerge. A protocol that will unify us all in the way we conduct trade, store and transmit value, in the way we invest, accumulate wealth and prosper. It will be one of the last equalizer forces needed in order to fully empower individuals and to give everyone the power and the opportunities they need to pursue and realize their dreams.

Luckily we no longer have to wait for such a solution to emerge - blockchain-based technologies (most notably Bitcoin) are already here and even though still in its infancy, it holds promise to create a globally unified, fully transparent and accessible finance system. More about this development in my next blog post.

* A reader may ask now “Has globalization significantly improved the situation between rich and poor?” The answer is a bit complicated. On one end, globalization has united us on many levels and allowed us to collaborate in order to create amazing new products - which provided work and new opportunities to people that have never had them before. But on the other end globalization has also quite largely increased the gap between the rich and the poor. Globalization created Free Capital (which I will discuss in later blog posts) which made it possible for capital to pursue the highest ROI opportunities available. As the name says, the capital is free to pursue whichever opportunity they deem as profitable. This is why we’ve seen corporates creating thousands of jobs in low-income countries in a short time span, but as new opportunities were opened, these people were quickly fired and replaced by other cheaper workers in different countries. This is one of the worst side effects of globalization.

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