Should ‘stupid’ people be allowed access to their own money?


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The World’s Biggest Blockchain Hackaton

I went to a very interesting meeting of the London Ethereum Meet-up yesterday. It was a presentation by Odyssey the world’s biggest blockchain hackathon. Odyssey is remarkable because teams work alongside a commercial sponsor who may (and often does) choose to continue to fund their work after the event. The speaker said, “the event ends on Monday and you should be prepared to continue work in Tuesday”.

Odyssey is based in Holland the spirit of innovation and excellence of execution suggests that we should have another Glorious Revolution.


The first two speakers from Nestegg and Nature 2.0 presented interesting ideas undermined by (for me) by very casual thinking about economic benefits.

For example, Nestegg which seeks to facilitate crowdfunded investment of public infrastructure said “users will benefit from the fact that infrastructure suppliers don’t have to pay interest to a bank”. This does not make sense economically because the interest paid by the infrastructure provider to the bank reflects the risk that the enterprise will fail. Nestegg is seeking to transfer this risk from sophisticated investors (banks) who can afford to lose money to “stupid” investors through crowdfunding. In fairness to the speaker I should point out he is a developer straight out of university and his heart is the right place.

Nature 2.0 made similarly bold propositions when talking about an IoT (Internet of Things) network of self-maintaining cars for public transport (think autonomous taxis). He said “cars do not care about money so the profits from a IoT network could be used to fund a basic income for citizens.” Again the capital to pay for this autonomous network of cars was to come from crowdfunding but unlike Nestegg the investors don’t even see a return on their capital. Nature 2.0 funds what they like to call “crazy shit” ideas to investigate IoT networks and in fairness the speaker’s job was not to put forward an economically sensible proposition but to get people thinking about crazy ideas.

These two presentations were capped by short talks by Vattenfall (grid balancing using electric cars) and APG (insurance) and the Dutch Ministry of the Interior (managing digital Ids).

Changing who owns infrastructure

The big idea inherent in these talks is that public infrastructure should not be owned by faceless utilities owned by pension funds and financed by banks but by the people who use it.

Blockchain makes this possible.

 But is it a good idea?

The present financial system has made us all incredibly rich. I say “all” because a person on the poverty line in the UK (60% of median income) has a higher income than most of the people in the world.

There are many legitimate complaints that can be made about the financial system but the pension industry actually works well. In general, ordinary people have well-diversified investments that are well-managed for low fees.

If, as I suggest, the developed nations are doing so well, why is there so much discontent among the people as shown by the Brexit and Trump votes and the rise of populist parties in Europe?

The slogan of the Leave party in the UK was “Take Back Control” and this more than any other single phrase captures the problem.

Powerless clients of the state

The majority of people in the developed world are powerless clients of the state. They are educated by the state, cared for by the state, receive cash benefits from the state and may live in state subsidised housing and see their jobs threatened by state sanctioned immigration and technological change. Marx said,

“All that is solid melts into air, all that is holy is profaned, and man is at last compelled to face with sober senses his real conditions of life, and his relations with his kind.”

He got the problem right, unfortunately his solution resulted in the deaths of millions and 4 generations of grinding poverty for the masses. We can do better.

Blood and Soil

The problem with technocratic government and the neo-liberal viewpoint of the global elite (like us dear reader) is that an optimised growth rate of 2.3% and high attractiveness to inward investment means nothing to you if you are unemployed and live in public housing in Northern England. If this is your life, then “blood and soil” may be all you have.

Power to the People

Both speakers emphasised that people could and should own the infrastructure that they use. The energy transition from fossil fuels to intermittent sources such as solar and wind will require billions of euro investment and provides an opportunity to make this a reality.

A Property Owning Democracy

St Margret Thatcher was a deep believer in the “property owning democracy”.

Regrettably the UK has laws that prevents anyone building a house and allows massive immigration. The inevitable consequence of this is the price of houses has risen so that most young people cannot afford one driving the country strongly to the left.

The conservative belief is that an investment in a house is an investment in the community and motivates the householder to become involved in local society to the benefit of all. Most importantly, to own your own house is to have some control over your own life. Margret Thatcher increased property ownership by selling off state owned housing. What can we do today?

Regional Ownership of Regional Assets

The great theme of blockchain is “decentralisation”. The technology provides the possibility to devolve both ownership and governance (e.g. the Maker DAO) to the individual.

Conservatives should push decentralisation of asset ownership and governance to the regions and the individual. In doing so they will undermine those on the left who want to return public infrastructure to state ownership so they can raise prices and increase their payroll vote.

Should ‘stupid’ people be allowed access to their own money?

To answer the question I posed in the title of this article, “Yes”. Financially unsophisticated investors should be allowed to invest a portion of their pension portfolio in regional assets. This will have many benefits but most importantly it will let people “Take Back Control”.