A short message from Marc Andreessen
Marc Andreessen gets some stick for some of his views, he’s also one of the leading venture capitalists of our day. In an ask me anything on Twitter he is asked “What do you find people in tech ( our outside) missing about web3 the most?”
The response is: “The enormous payoff from decentralization and permissionless innovation. I cannot believe more people don't understand this. It's so obvious.”
We would agree that it’s obvious but this isn’t something specific to Web3 (and we’ll admit we’ve no idea what that is supposed to mean). Not grasping it is also not something specific to tech bros, it’s a widespread misunderstanding across society.
For, of course, it’s the justification for a free market economy. Someone has an idea, they try it. If it works, they do more of it, others copy, the world advances because there’s one more thing being done that works.
In a world where permission is required then the world advances at the speed the permissions are granted. Or, given that those granting the permissions will not be omniscient nor necessarily benevolent the world does not advance as permission is not granted. This of course gets worse in a planned economy because the only things that are even put up for permission are those thought of by those in the planning system. Bureaucracies not being known as hotbeds of innovative ideas.
Our base problem to solve is that the universe of things we can do expands as technology advances. The list of things we want to have done varies with human tastes, fashions and even whims. We thus require some sort of matching process between what can be done and what folks want to have done. It is precisely the freedom of entry - that permissionless innovation, entirely decentralised as it is - into the market that defines that idea of the “free” market. It’s also the very feature of the system that works to make all of us, as we are, so stonkingly rich by any historic or geographic standard.
This is why certificates of need are an anathema. So too, to our mind, the ludicrous seismic restrictions upon fracking in the UK (no, we do not believe they are there for good scientific reason, they’re there to stop it happening). In fact, we argue that the economy as a whole is larded with these needs for permissions. Which is why so much of the innovation that does happen is in those new areas, online and in code, where there are no incumbents or bureaucracies to act as permission deniers.
Think, as a contrast, between the landraces going on in whatever that metaverse might be and the time it takes to gain planning permission in this real world. We expect several cycles of try, build, go bust and start again in that first in the time it would take to gain the permits to put in the footings in that second.
The speed of this matters. For economic growth is, by definition, the speed at which these new things happen. So, if we’ve built a society that requires permission to try new things then economic growth will be slower.
Or, as varied philosophers have been commenting upon since Adam Smith first pointed it out 246 years ago, let’s free the markets and all go get rich. Again that is, richer than the last 246 years of the process has already made us.