A 5-minute recipe for the economic shift change
There’s clearly more complexity and wider stakeholders than mentioned above but the ‘three C’s’ (change-maker, cooperative and collaborative movements) are the main protagonists.
The basic arguments put forward in this article are that we’re currently experiencing a shift change. One aspect is a rebalancing in our economy towards a collaborative framing rather than competitive one. It’s visible, firstly, through the change-maker movement (symbolized by the Transition Initiatives), who are developing alternative economic practices that includes a ‘community dynamic’. Alone the change-makers are too niche or marginalized. But they are aligned well with the cooperative movement, which is sizeable and already active in all key sectors. These two movements alone will trigger the default capitalism versus socialism (or communism) blockages rather than a shift change. But the predominantly online collaboration movement is sizable, disruptive and not as laden with old dogmas. These three movements provide an ecosystem of approaches, in a diversity of industries, that collectively equate to a credible alternative to (if not evolution of) our current economic system.
The move towards a more collaborative society may well be intensified by increased economic instability. Either way, inertia will likely slow the shift down and vested interests may try to stop it but if the ingredients are balanced right the only thing that can prevent an economic shift from happening is if the mainstream majority (sometimes called the 99%) rejects the changes. That is, the mainstream, do not need to be in favour but it’s essential that they are not against the changes either. Moreover, the reactions to change will be different in each region as is seen with the Arab Spring.
To shift or not to shift
I’ve stated that we’re currently experiencing a shift change. By this I mean a fundamental change to our systems that could be described as a kind of generational or evolutionary leap. For those who don’t believe that we’re in the middle of a major shift right now, and to demonstrate what is meant by shift, here are some examples.
The invention of the internet has triggered a change tantamount to that started by the printing press. Environmental limits are causing a transformation in business not seen since the industrial revolution. Permaculture, a radically effective design technique, demonstrates the potential for a change in farming, not seen since the start of the agricultural revolution. The length and depth of the current economic crisis is destined to cause an economic reorientation similar to those seen after WW2 and the Great Depression and finally the growth of countries like China and India brings with it a change in geo-political power distribution, similar to the one between Europe and the USA in the last century.
One way or another we’re in the middle of a shift and the question is ‘how big?’ and ‘to where?’. Some premises or themes are constant across all of the above shifts. In this article I will focus on the premise that our economy is moving from competition to collaboration. For clarity, it’s not that we will magically stop competing. It’s more a rebalancing. We’ll compete less, and for more varied reasons, so that we have space to collaborate more.
Ascent of the Change-makers
I’ve stated the change-makers provide a window into the new economy and its community dynamic. Lets explore this in more detail. The change-makers are a movement that is most visible across the globe as the protest movement, for example, Occupy, the Arab Spring and the many other environmental, human rights and political change-maker groups. They are often fighting for the same core changes like more participation and openness. This movement is in ascent, firstly because, it is now internet enabled. Secondly, for the environmentalists, there’s a sense that the need for change is now urgent, which has added impetus and growth. Thirdly, and perhaps most importantly for this article, many of the protestors from previous decades gave up protesting and joined together with non-protesting like minded people and started to create working examples of different social and economic structures.
Transition Towns(1) is a symbolic example of people working together to create alternatives. Transition Towns started in earnest when small group of people in Totnes, UK(2), wanted to make their community more vibrant and resilient in the face of climate change and dwindling energy resources. They set up a group called Transition Town Totnes and this group set up a Garden Share project, launched the Totnes Pound as a local currency, planted nut trees and many other projects.
These ideas grew and now there are 2,000 community groups(3) using the Transition Town model worldwide. Also, the mayor of Bristol receives his salary in Bristol Pounds(4), a currency inspired by the Totnes Pound, and there are 70,000 registered sharers on landshare.net(5), which was inspired by Garden Share.
Despite their impressive growth, these projects alone are niche, in global economic terms, and so don’t in themselves, represent a shift. But interestingly the projects highlighted here focus on things like land ownership, money creation and food production, which are central pillars of the traditional economy. As such they offer us an important taste of different ways of operating the economy.
All of these Transition projects have things in common like ‘working together’ with ‘sharing and openness’ for ‘common benefits’. It’s through these kinds of practices that Transition Towns believe they can create a more sustainable, vibrant, just and resilient future. Almost the polar opposite are the basic principles of our orthodox economic system, which are to ‘compete’ with ‘ownership and control’ for ‘personal gain’.
These change-maker projects can also teach us about the idea of strength in numbers and the power of the community. The notion of ‘survival of the fittest’ has underpinned our competition-driven economy for a long time but in just about every field we’re now realizing that cooperation can lead to ‘fitter’ groups. We’re recognizing that it’s not a dog eat do world after all. Dogs eat dogs as frequently as humans eat humans. Lou Brown, founder of Garden Share, said “I wouldn’t have had the confidence to set up the project had I not been part of the Transition group”. Along side this, the increased community dynamic also increases the importance of relationships versus the importance of money.
Our final and extremely important learning, from these alternative economics examples, is one where competition plays a significant role. It’s what Ben Brangwyn (Transition Network Co-Founder) calls ‘learning networks’ and Chris Anderson (TED Founder) calls ‘crowd accelerated innovation’(6). For example, at the time when the Transition movement was founded, as a community model, there were at least 3 or 4 other community models being launched(7). Not all of those models survived. Transition is what appears to be the ‘fittest’ and spread like wild fire because of the crowd’s endorsement. This is what Chris calls “a self-fueling cycle of learning that could be as significant as the invention of print.” This “invention” uses a more progressive mix of sharing, competition and collaboration.
In reality there are many features of the new economy and for this article we’ve focused in on those specific to the increase in community in the economy. It is suggested that a shift towards community will have positive impact promoting many, if not all, of the other features listed below.
The upsurge in new economic activities
These basic new economic principles of ‘working together’ with ‘sharing and openness’ for ‘common benefits’ can easily be dismissed as being utopian or naive. But i’ve stated that they’re actually part of a wider trend and can be seen as growing throughout mainstream business and every facet of society. I only scratch the surface here, but for example, we’ve had new UK legislation to support community ownership of land and buildings, as well as new financial models to support shared investment in energy companies and other projects. Germany, is a world leader in renewables of which 65% is in shared ownership or owned directly by community members(8).
Sharing and collaborating is a core fundamental of the online business world, which is highly socialized. Sharing is just part of a wider rebalancing from ownership to access. We can see this in many offline businesses where we no longer need to purchase and own printers or phones or even plants, these are all commonly leased items. I no longer need to buy a phone or TV receiver, these are all part of my service contracts.
The awakening of the cooperative movement
I’ve stated that the size of the cooperative movement adds credibility to the practices highlighted by the change-makers. Most people do not realize that the cooperative movement, founded in its current form in the 1840’s, is already a significant contributor to our global economy. 1 billion people are coop members and 20% more people work for coops than multinationals. They deliver essential goods as well as luxury goods and services. For example, 90% Champaign vineyards are owned by coops(9). Barcelona Football Club, the London Symphony Orchestra and the largest retailer in Switzerland are all coops(10). The coop structure is present in all sectors and is just as pervasive in Iran and China as it is in Argentina and the USA.
Notably, the cooperative movement is currently waking up to the size of its own power. 2012 is the UN international year of the cooperative(11). During this year there’s been a series of joint programs, events and branding, which has brought together disparate parts of the cooperative movement.
There’s a mistaken belief that without capitalism we would lose many of the goods and services we love. We need to become aware that this is not true. Whether we need to consume so much is a separate debate but important to this article is the fact that the masses need to awaken their minds to a possible and credible alternative to our current form of capitalism. This quick video below shows the core capitalism dependency myth, that exists within the minds of many. [Sometimes you need to refresh to see the video].
Whilst the video is borderline ridiculous it does show off a fundamental belief that is held by many. However, every marker on the map below represents one of the more than 29,000 US cooperatives that operate at some 73,000 places of business throughout the United States alone. These cooperatives own more than $3 trillion in assets, and generate over $500 billion in revenue and $25 billion in wages(12).
Another thing that the video clip highlights is the default capitalism versus socialism (or communism) debate. Seeing this as a straight fight misses the point that these systems are all now outdated given internet enabled collaboration and limits to growth.
We don’t need an alternative economic system. We need an evolution of our system. We need to see it like a full version upgrade of a computer operating system, for example, from Windows Vista to Windows 8. Where capitalism (or Windows code) undergoes significant enhancements and improvements but the best of the original code is retained. This is an important analogy because not all capitalism is equal. We can have a systemic shift within capitalism. In addition to the code upgrade, the operating system is now not framed in a propriety ‘fence’. To best highlight the type of economic shift that is being proposed here we now need to imagine that the code is made freely available through a more porous open source collaborative framing. It’s a kind of business model change as well as code upgrade.
The rise of the collaborative economy
I’ve claimed that the first two movements alone will likely trigger opposition rather than a shift change because of traditional dogmas and that our second economic giant, the collaboration movement, doesn’t have that issue to the same extent. It is distinctly different from the cooperative movement. The cooperative movement is strong in areas such as farming, energy, retail and finance, whereas the collaborative movement is most visible as an online and information economy phenomenon, rapidly growing over the last decade or so. The cooperative movement was founded as a reactionary response to the oppressive conditions of the industrial revolution. However, the collaborative movement is simply a technology-enabled boom. I’d even go as far to say that it is technology enabling our desire to collaborate.
To give an idea of the size of this movement, the open content and open source silo alone, was estimated to account for one sixth of U.S. GDP in 2007 and up 5% on 2006(13). This is only one facet of the collaborative movement. And it’s not just a peripheral operator, with 90% of the world’s top 500 supercomputers using the open source Linux software providing core security and information services(14).
Some would argue that the collaborative economy is already disrupting the old economy as traditional enterprises and institutions are finding that they have to rapidly adapt in order to survive. For example, peer to peer technologies enable people to bypass middleman industries (e.g. kickstarter and crowd funding platforms). Collaborative systems can harnesses the power of the crowd (e.g. Wikipedia). Open source software means that coders don’t need to start from scratch undermining closed source products (e.g. wordpress). Creative commons, and other non-proprietary licensing, have supported free sharing of previously purchased software, photos, designs, films, books etc. Finally, collaborative consumption companies have become new competitors in old sectors, some by utilising existing surplus capacity (e.g. Airbnb). This is just a glimpse of an explosion of collaborative systems that undermine and out perform old markets.
A key point is that the collaboration techniques, that are already prevalent online, are now creeping offline into just about every facet of our societies. For example, you can now find open source tractors and knitting machines as well as architects, and the open source political party in Germany got 10% of the vote in some constituencies. A final key point is that there are many places where the cooperative and collaborative movements overlap.
I want to offer some clear proposals for discussion. If implemented they could help speed up the shift to a more collaborative economy.
1. Develop a blueprint for the new collaborative economy.
The irony is that collaborative and cooperative movements urgently need to collaborate more and design a blueprint for a new economic model. This pairing displays a kind of ecology of economic practices that collectively need each other.
The blueprint should be developed as a multi-stakeholder process involving all sectors (government and charities etc) and would be framed as the collaborative economy rather than the cooperative economy. Collaborative because these collaborative models are too free flowing to adhere to traditional cooperative principles. Let;s call this new economic model “Collaborism”, for want of a better name, of which the cooperative structure will in some case become outdated and in others it will be the cornerstone ingredient.
2. Develop, prove and promote new cultural ‘stories’ that help speed up the shift.
Stories such as there is no alternative to free market capitalism help perpetuate the current system. The proposal is to create new stories, that are grounded in the realities discussed here, such as; 1. There is a credible alternative to our existing economy and it’s based on greater collaboration. 2. Change-makers should focus on creating a new economy as this is the Achilles heel of change. 3. The change-maker community is a part of a wider collaborative economy and is not just a niche anymore. 4. Collaboration is incredibly capable of delivering value in our communities.
The Transition Network’s REconomy Project (where I am employed) is one organization that is working to create these new stories and myths and to promote and accelerate innovation in these areas. It is recommended that a wider group of like-minded organisations agree on what new stories are wanting to be told and prove and promote them in any and all ways that they see fit.
3. Identify the country most likely to shift first and/or deepest and focus strategies on that country.
Some counties are better placed for cultural and economic shifts than others. For example, Spain is likely to be susceptible to a shift of this kind as it has lots of the main protagonists identified in the 5-minute recipe above. Manuel Castells, the social scientist, says that;
“97% of people surveyed [in Catalonia] have engaged in non-capitalist economic activity”(15)
His research has shown that people in Barcelona are open to using new economic approaches and in fact are already doing so.
The proposed shift is not to eradicate capitalism. Rather, it is to evolve the best from the old system into a new system set within a more collaborative framework. Once this new collaborative framing gains some momentum it will likely find some support within very traditional institutions as it allies very well with charities, governments and social care providers (like hospitals and youth clubs), who are already better aligned with the collaborative principles than they are with the self interest and personal gain principles of the old economy. Not least because these institutions are forced to bear the burden of externalized costs derived from standard corporate practices.
Another core factor that supports this new collaborative framing is seen as the ongoing change in focus for many protestors and change-makers. Despite some successes, environmentalism ‘as usual’, appears to be failing against a self-correcting economic juggernaut. This failure is most starkly seen in our inability to reduce carbon emissions to a safe level. As such, many change-makers are moving their focus from “saving the planet” or “helping the poor” to finding a credible alternative to our destructive economy. With this new economic lens, change-makers will start to realize that they are no longer part of a niche struggling to get social justice or environmental messages out to the mainstream. They will start to see themselves as having a potentially influential role within this very large collaborative economic community that is already in existence. Once these largely psychological changes have happened, we can start to put together the blueprint of a truly credible alternative (actually evolved rather than alternative), economic model that many more people can start to believe in. This belief then becomes self fueling and self fulfilling.
(6) http://www.ted.com/talks/chris_anderson_how_web_video_powers_global_innovation.html see the blurb that accompanies this video
(7) See Carbon Reduction Action Groups & Low Carbon Communities (Network). Also see Ashton Haynes Going Carbon Neutral had community groups copying their approach, among others
(13) http://p2p.coop/files/reports/collaborative-economy-2012.pdf page 255 (see the table on the fair use economy)
(2) http://p2p.coop/files/reports/collaborative-economy-2012.pdf page 255 (see the table on the fair use economy)
Photo credits : Feature image is a photo of a Banksy, Brixton Pound from Brixton Pound, US Cooperatives map from National Cooperative Business Association & 40 Industrial machines from Open Source Ecology. All other photos courtesy of Transition Network or REconomy Project