Tuesday, February 10, 2015

Choosing Community-Based Capitalism

We are lucky to live in a primarily capitalist economy that enables wealth accumulation and investment, depends on personal freedom, and fosters invention and the efficient use of resources. Indeed, capitalism is increasingly the world-wide system of choice, although its manifestations vary widely from a free-market tilt to small demonstrations of capitalist enterprise in authoritarian countries.  

Like any system, capitalism can be abused. In the U.S., great wealth is controlled by powerful interests with a bent toward social Darwinism, rather than equal opportunity, human rights, and the value of the commons. True free-market capitalism enables the untrammeled exercise of human greed and self-interest. For example, freed by the past 30 years of deregulation, leaders of the financial industry have reaped huge personal fortunes at the expense of millions of individuals.

So, capitalism can't just roll along like “ole man river;” it must guard against potential abuses through legislation, regulation and, often, legal action. It must also be strategic, anticipating shifts in human and natural resource supplies (e.g. location, availability, and suitability), so that profits can continue to be accumulated and reinvested for further growth.
  
Refreshingly, after decades of this country’s self-indulgence in a “me-oriented,” materialistic society, a new kind of capitalism is emerging.  It is a grass-roots capitalism that pursues reasonable profits as well as human rights, natural resource conservation, community-building, and a modest material life. I’ve called it community-based capitalism.
 
Community-based capitalism values durable over disposable products, sharing over personal ownership, recycling and reusing over trashing, and mindful over mindless consumption. It recognizes that resources are finite, equal opportunity is essential to economic growth, human societies are interdependent around the globe, and that chasing more “stuff” (beyond the basics) is inimical to meeting life’s major challenges of health, security, happiness, and stewardship of our environment. And, it seeks profit for reinvestment and economic growth, the hallmark of capitalism.

Consider Neal Gorenflo, a Silicon Valley resident described in “The Sharing Economy” in the magazine FastCompany. Among other things, Neal shares a nanny with his neighbor and makes loans to others, known and unknown, through a peer-to-peer banking site called Lending Club.  When in San Francisco, he uses a Prius through City CarShare, a not-for-profit version of Zipcar. Once a corporate executive for strategic planning, Gorenflo quit his job to downsize his life, “removing all the things that don’t add value and concentrating on the things that deliver value.” He has since started Shareable, a non-profit website that provides a playbook for how to share anything and everything.

Neal is only one of thousands world-wide who have found new motivation for thinking creatively, productively, and in ways that yield a good living - while doing good for their communities and the earth. These “new capitalists” and entrepreneurs see the world reflexively in terms of a triple bottom-line: profits plus community plus Mother Nature. 

Another “sharing guru,” ex-corporate innovation consultant Rachel Botsman, advocates that access to goods and skills is more important than owning them. In her book, What’s Mine is Yours: The Rise of Collaborative Consumption, she concludes that community-based capitalism “could be as big as the Industrial Revolution in the way we think about ownership.” Nor is it without economic value: Botsman predicts the sharing economy could be a $110 billion plus market.

Another type of community-based capitalism includes “social enterprise,” which addresses social issues using for-profit business models. A growing grass-roots effort is the use of community currency, paper scrip circulated and banked within a local region to empower new business growth and stronger community ties. Most grass-roots of all are Time Banks, community website accounts through which people trade hours of service, one hour for one hour, to help each other accomplish real-world tasks. This is the good news of trends in today’s capitalism!