“I’ll look at everything around me and I will vow to bear in mind, that alla this was just someone’s idea. It could just as well be mine.” — Ani Difranco
I recently published an article on The Future of Capitalism, covering a new, economic model that I began working on over two decades ago. It started in the 90’s with my visceral disdain for a luxury car as a symbol of consumerism and wealth, and all came together back in November of 2019, when I woke up one morning thinking about digital products. Obtuse? Perhaps.
Let me explain.
Consumerism as a Metric
Addressing economic inequality is nearly exclusively discussed in terms of income and wealth redistribution. To learn how issues get framed and problems get solved (or strategically go unsolved), you just need to follow the incentive structures, or money as a means of access. The more I learned about these issues over the last 20 years, the more I wanted to side step income as a means of access and instead deal with increasing access to goods and services directly. It turns out taking this approach took me closer to solving some of the issues surrounding consumerism by proxy. And that luxury car, absurd as it is, became just one example for me to mine for new relationships between products, consumers, and the prices they pay.
Here is a quick summary of how it works.
Let’s keep it simple and use an app as the example rather than a car. When you bring this to market, the end user’s access to the app (the price they pay to download it) can be radically altered by using a cost based economic model. Let’s just say this app has a fixed cost of $1000 to create it, and is sold as a downloadable product for one dollar per download. By traditional standards, the creator of this app is taking on all of the risk until the first 1000 users have bought it, and after that they are making a profit. At this point they are considered to be progressively more successful as they amass more users and make more money. This system is fine, except it breaks at scale because once someone as someone amasses larger and larger amounts of wealth, we use other systems to try to offset the inequality inherent in that kind of hoarding of money.
Fractured Systems
To try to put some of this money back into the hands of our “group representatives” (also known as the government) – presumably for the common good – we use taxation. But that is met with evasive measures, offshore holding companies, and sheltering systems that are dizzyingly complicated and opaque. To address unfair market dominance, we use anti-trust laws, and the enforcement of those is predictably met with enormous legal defense. This is a common tug of war between the health of the whole and the self interest of the individual or small private group within a capitalist system that isn’t designed to handle this sort of dialogue. So the capitalism we currently have breaks at scale.
But most companies don’t get that far. Most app makers for example, aren’t big operations and they aren’t making all that much money. They haven’t gone to scale. But what if getting to scale was easier? Rather than trade your equity, or future cash flow, or controlling board seats for the “firepower” (read: capital from investors) to push the business to scale, what if you partnered up with your own consumers instead? What if you were able to systematize a way to grow virally and cut your customers in on it instead of angel investors or venture capitalists?
Interconnected Rebates
With a cost based economic model, the end user and the innovator are in it together. In exchange for getting to scale faster through viral referral from a growing user base, the user is incentivized by seeing the cost of their purchase go down, even retroactively, as a refund back to them.
Imagine downloading this type of app, and along with it comes a digital wallet. That wallet shows the user their balance in a native coin to the cost based ecosystem that the app and app creator is participating in. Once the threshold of the cost and incentive to the creator is met, the wallet begins to show a slowly increasing balance, based on a flat, equal redistribution of the income that flows into the ecosystem from more users purchasing the app for a dollar.
Now imagine being the later adoption user, the one who is purchasing after the cost and incentive threshold is met. They purchase the app for a dollar and immediately their wallet balance reflects a partial refund of their money, let’s say, one penny at first. In essence then, they did not purchase that app for one dollar, but for 99 cents, and as their wallet balance goes up as more users purchase the app, the will see the money they put into the ecosystem begin to come back to them.
Now let’s put this app in an ecosystem of lots of other apps, and maybe also a utility company. Let’s say one of the companies tied to the wallet is an app to pay for your electricity bill, and the balance that is going up from more users onboarding to one app is reflected in your growing balance in the wallet, which you use to pay for your utility bill. Now the massive crowd adoption of one app can help pay the balance due with another one.
Optimism Meets Futurism
I’m a futurist at heart. I can’t help but think of what the world could look like if it was designed for more equality, access, and ease, and for less trauma, fear, and force. It’s not that I believe all people are saints or something, but I do see that crime rates follow unemployment rates, so the fact that creating more systematic opportunity is the way to rid us of a problem, rather than continue with our current, futile efforts to blame and reform the individual. It’s more about the faulty design of the system than the moral deficit of the individual operating inside of it.
Humans are a lot more like ants than monkeys. I remind myself of that when I take a 10,000 foot view of capitalism and consumerism. It is the only way that I can quit making a moral plea to people to “please behave better” and start creating a structure that sets people up for success. One that doesn’t distinguish between the good, the bad, the early, the late, the rich, or the poor. It just is, and it creates greater access for all.
With more efficient systems, I believe we will see an evolution in human behavior that we cannot currently even dream of. I prefer to imagine a world where humans act as one species, where we understand our innate interconnectedness, and flourish from the systems we’ve designed to best reflect that fundamental fact.
Hopefully this regenerative capitalist ecosystem can be the scaffolding for a better ant farm for all of us.
This project is currently under development. To get involved please comment, email me or submit your project here.