 The
paradox of the economy is that we buyers have all the power, but there
are so many of us and we are so uncoordinated that it is the sellers
who effectively wield power -- they tell us what they have to sell to
us, what the limits and restrictions are, and, thanks to oligopolies'
ability to fix prices, what we will have to pay for them.
This economy is therefore not really a market economy at all, because of these profound distortions:
- Demand
for a product does not ensure that someone will enter the market to
supply it -- large suppliers at every level of the economy, from
manufacturing to retail, conspire (e.g. by restricting access to shelf
space and the media) to ensure that small and new players cannot enter
the market unless they are exceptionally clever, patient and wealthy.
- The
price for a product is not where the supply and demand curves overlap,
but rather the highest price the suppliers, by oligopoly agreement, can
extort from buyers.
- The desire of consumers for socially and
environmentally responsible products is not accommodated in the market
-- because such responsibility has a cost associated with it, suppliers
will always seek to use the cheapest materials and the cheapest labour
from the most unregulated parts of the world, even if that entails
bribing local officials to deregulate or not enforce what regulations
exist.
- Suppliers are interested only in maximizing return on
investment for their executives and shareholders, not in customer
satisfaction or product quality. Suppliers therefore have an interest
in (a) supplying a product that will prematurely break or become
obsolete, and which has an inadequate warranty, so the customer is
forced to buy a new one frequently, (b) suing customers who try to
circumvent inflated prices for their products by ingeniously trading or
sharing with other customers (essentially trying to reduce price
distortions created by suppliers), (c) lobbying governments for
absurdly broad intellectual property rights and suing potential
competitors to block them from entering their markets and introducing
innovation or quality into their products, and (d) lying to their
customers in pervasive and hugely-expensive advertising campaigns (the
cost of which are passed along to the customers in the inflated price).
The
Internet has justifiably terrified suppliers, because it provides a new
and powerful avenue for customers to organize and to share information
and even products (suppliers want customers to throw out their old
products, not sell them used to other customers who would otherwise be
forced to buy new ones), and for small entrepreneurial companies to get
rid of the large, expensive middlemen that currently stand between them
and their customers. Most importantly, the Internet provides a vehicle for customers to disruptively innovate the entire economy the way (as Clay Christensen explains) unusual companies have disruptively innovated markets and displaced incumbent producers.
There are three elements to such a disruption:
- The creation of broad, free 'information markets' that will allow customers to identify and support
- innovative new suppliers and innovative products,
- small niche and local suppliers,
- suppliers with better quality products and services,
- socially and environmentally responsible suppliers, and
- markets for used and free products.
- The creation of millions of small, entrepreneurial, networked natural enterprises
that are not beholden to executive and shareholder greed, but which are
instead responsible to their collective workers, their customers, and
the communities in which they operate.
- The introduction of a Generosity Economy (my preferred name for a Gift Economy), built around people in small, networked intentional communities, working together in their collective interest to
- ensure that all citizens have everything they need for a comfortable subsistence life free of charge,
- enable
people with time and personal talents and other gifts to produce things
and share them with people who can benefit from them, free of charge,
peer-to-peer or through public institutions like libraries, public
broadcasters and public research programs, while compensating
those who
give much more than they receive,
- tax bads (non-renewable resource use, pollution, waste, and hoarding) instead of goods and services, in order to fund (a) above,
- identify and fund projects to deal with urgent non-recurring human needs (like diseases and relief efforts) as they occur,
- address the Tragedy of the Commons, and
- remedy
the steady loss of electronic freedom and discouragement of innovation
in the face of huge, expensive 'digital rights' campaigns and
over-reaching intellectual property law campaigns.
Information markets, natural enterprises and intentional communities. How might we bring these three building blocks about?
Information
markets have been around for awhile, and Consumer Reports has been
doing good work in this area for decades. But CR cannot afford to give
the product of their substantial and expensive research away free. This
is a real shame, because it means the poor need to go to the library to
learn how to spend their money more effectively. There are some sites
like Insider Pages and ePinions that provide customer opinions on some
products and services for free, but the content is thin and the quality
variable. What we need to do:
- Get Open Source software
developers, independent product evaluators, government 'watchdog'
agencies, social and environmental rating organizations and other
content providers collaborating to develop easy-to-use, well-promoted,
secure, reliable one-stop 'information markets' that will allow
customers to 'do their homework' before they buy, will allow customers
to identify and be canvassed about unmet needs, dissatisfactions and
new product ideas that innovators can resolve, and that will support
viral marketing to allow innovative new suppliers to crack into markets
without needing huge advertising expenditures.
- Develop free, easy-to-use, attractive 'virtual markets' for used and free products.
The
main obstacle to developing natural enterprises is education: Few
business schools, MBA programs or high school commerce programs
currently provide information on how to start up and run your own
entrepreneurial business, and those that do are often tainted with
outdated (pre-Internet) and discouraging information about what is
involved in starting your own business, cluttered with unscalable and
often-irrelevant 'management' advice, and replete with myths about
entrepreneurship being complicated, grueling, risky, and high-stress.
What we need to do:
- Develop new, innovative curricula on new
enterprise formation, which include novel ways to find partners and to
market, finance, and run your business in an egalitarian, low-stress,
enjoyable way that does not compromise principles of social and
environmental responsibility or require entrepreneurs to sacrifice
family and personal life, leisure time or enterprise control to
succeed. These curricula would include substantial courses in business
innovation and business research, as well as other critical business
skills like critical thinking and collaboration.
- Rather than
teaching these new curricula in classrooms, provide the core readings
online and free of charge, and have the programs located out at various
successful entrepreneurs' business locations in each community where
they are offered. The entrepreneurs would voluntarily host the students
for one 'class' each, offer a tour of their establishment, and answer
students' questions, focused on the 'theme' for that class. Class
facilitators would organize the visits, moderate the Q&A, and, with
the help of the volunteer entrepreneurs, critique students' business
plans for their own proposed enterprises.
- Offer these new
curricula starting in high school, and encourage universities to make
them mandatory prerequisites for admission and financing organizations
and governments to offer financial incentives for students to take
them.
- Refuse to tolerate an economic and educational system
that fails to equip students to make a meaningful and dignified life
for themselves when they leave it. Encourage governments to provide
substantial support for new innovative
enterprises, by providing such businesses with preference in government
contracts, and through grants and short-term loans to them. It would be
hard to find an investment with a better ROI than one that gives people
self-esteem and self-reliance, makes them independent and encourages a
more innovative, responsible and entrepreneurial society.
Community-based
councils will be the last piece of the puzzle to fall into place. As
long as the majority of people are employed by large organizations that
may transfer them often and unpredictably, or require them to work
standard, inflexible shifts, most communities will continue to be
bedroom communities, where the people have nothing in common except
their economic class and proximity to their workplace. True communities
need to be self-selected and self-managed intentional communities. What we need to do:
- Teach
young people in school about intentional communities, how they are set
up and run, and about the value of community. Enable them to visit
existing intentional communities.
- Change zoning laws to
encourage, rather than discourage, the establishment of intentional
communities, where all or most of the property is held in common and
where more than half of the land area is protected from development and
kept in (or allowed to revert to) its natural state.
- Create Internet-based tools that allow communities to collaborate and share information and resources.
- Allow communities to self-manage,
subject to a regular audit by an independent body that ensures they
meet certain standards of egalitarianism (no cults), social and
environmental responsibility, and quality of life. Certification as a
self-managed community would allow you to run your own schools, health
facilities and any other local, county and state government functions
of your choosing, and to opt out of paying the commensurate taxes to
those governments. Such communities could also elect to have their own
currency, or a currency shared with other self-managed communities.
This
is a bottom-up prescription for change. Over time, more and more of the
economy and people's political and social life would revolve around
intentional communities, natural enterprises and information markets.
The world would become much more local, more egalitarian, more
networked and more responsible. Large corporations selling
heavily-hyped products trucked halfway around the world to exploit
cheap and unregulated material and labour markets would soon find they
were irrelevant, unable to compete with products crafted with pride by
local entrepreneurs and distributed inexpensively through the
Generosity Economy. Although national governments would still be needed
as regulators of community welfare and commerce, other levels of
government would eventually disappear into irrelevance as well.
It
is telling that Christensen's study of disruptive innovation finds that
almost all such innovation occurs quietly from below, rather than
trying to compete head-on with existing companies' well-established and
fiercely defended and promoted products. With information markets,
natural enterprises and intentional communities we can quietly disrupt
and replace not only the rapacious multi-national corporations and the
distorted and dysfunctional economy they thrive in, but the
bureaucratic, inept and often corrupt governments that support them.
All from below. |
MADE IN CANADA
trust your
instincts 
