It doesn´t take a rocket scientist to realize that the economy is not working for many. Despite record-breaking stock market performance and record profits from many banks and technology companies, income inequality in many advanced countries, especially in the U.S., has actually been worsening. In 2010, Oxfam found that the richest 388 billionaires around the globe had the same aggregate wealth that the poorest 50 percent of the people on the planet had (i.e., 388 people had the same wealth as about 3.5 billion people combined). In 2015, the number of wealthy people required to match the total income of the bottom 50 percent had dropped to just 62 while the top one percent of the world’s wealthiest now had more combined wealth than the rest of the 99 percent of the world’s population. In 2017, the number had dwindled to just the wealthiest eight!
Labor productivity has never been greater but the rewards from this are not being evenly distributed. In fact, artificial intelligence, robotics, and smart devices are wreaking havoc on labor markets and generating growing calls for basic income to help avert even worse income inequality in the coming years. Aside from rampant inequalities, we seem to be stuck in making real progress on climate change and losses of biodiversity. In short, many of us have begun to question whether market-based capitalism as we know it is capable of improving conditions for planet and people.
Throughout the past several years I have been conducting research on a range of sustainable entrepreneurial initiatives around the globe, interviewing hundreds of inspiring entrepreneurs along the way. What I have come to realize is that there is a new wave of entrepreneurial organizing around the world, oriented toward making things better for the 99 percent. Yet much of this organizing does not fit the mold of traditional, capitalist approaches to startups, venture finance, growth and exit.
In my latest book, I refer to this phenomenon as post-capitalist entrepreneurship. For me it is something more than just entrepreneurship that also seeks to balance social and/or ecological impacts. Post-capitalist entrepreneurship (PCE) instead is about changing the underlying logic of entrepreneurial organizing, governance models, legal structures, approach to intellectual property, perception of consumption and production and of course the ultimate objectives and metrics of success.
In my view there is somewhat of a continuum of PCE from those closest to our current understanding of market-based entrepreneurship to more extreme versions of PCE:
For-benefit (B Corps)
On the surface, B Corps may seem like mere representations of responsible market-based entrepreneurship. After all, the majority of B Corps are for-profit enterprises, frequently with board of directors, closed, intellectual property models, private ownership and often receive traditional investment from angels and venture capitalists. Some B Corps are even publicly traded on traditional stock exchanges (e.g. Etsy, Natura). What makes B Corps the starting point for PCE is that they are legally bound to embrace social and ecological concerns. If “there is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits” as the famed economist, Milton Friedman wrote in Capitalism and Freedom, then companies who legally bound themselves to something beyond profits, as B Corps do, are something different than what we think market-based enterprises are about.
The media has offered plenty of coverage of the platform capitalist business models like Uber, Airbnb and Task Rabbit. Yet, what has been underexplored so far is the emergence of alternative models of sharing economy platforms which embrace ideas like the commons and cooperative governance. The platform cooperative movement is picking up steam with support from the Platform Cooperative Consortium, as well as a growing number of innovators embracing the Occupy Movement´s values, but leveraging technology to turn their activism into collective entrepreneurial action.
Peer Production and Consumption While most of the sharing economy, including platform cooperatives, are primarily oriented towards recirculated goods and skills in society more efficiently, there is something potentially even more impactful happening mostly in cities around the globe. The maker movement is picking up steam around the globe, supported by the 1100 Fab Labs, platforms like Etsy which connect makers with distributed customers seeking unique, instead of mass-produced products made in China, and numerous other democratized technologies making innovation more affordable for the 99 percent.
Loic Le Goueff, a 27-year-old Swiss national agrarian, and his partner launched a startup called Aquapioneers. Through access to Barcelona’s Green Fab Lab, the pair had managed to design and build a closed loop aquaponics device which can be used by homeowners and renters to produce their own vegetables at their homes with minimum investment and low operating costs. What makes Aquapioneers so interesting is that they have committed to the maker community and to open source hardware. In fact, they are making their design freely available for downloading and printing at the more than 1,100 Fab Labs around the world.
The Fab City initiative encourages member cities to commit to producing at least 50 percent of everything consumed in the city by 2054. More than a dozen cities around the world including Amsterdam, Barcelona, Boston, Detroit and Santiago, Chile, have already made the ambitious commitment. To achieve these goals cities such as Barcelona have been supporting a grassroots maker movement of producers and consumers for everything from energy and housing to furniture and food. Sometimes cash changes hands while in others, alternative currencies, even local, social, cryptocurrencies are being used to encourage value exchange.
Distributed Autonomous Organization (DAOs) Still mostly a dream, the idea behind DAOs is that you could have platforms connecting users for exchange without an intermediary monetizing the transactions. Think Uber without Uber in the middle, Airbnb without Airbnb. DAOs would be blockchain-enabled platforms facilitating exchange through smart contracts and distributed ledgers but no ownership of the platform. Essentially DAOs are like open source software supported by developers around the globe designed to take out the platform capitalist intermediaries and their venture capitalists. One of the most advanced experiments in the DAO space is OpenBazaar which essentially aims to be like eBay without eBay.
Conclusion I am not so naïve as to suggest that capitalism is dead or perhaps that it could die anytime soon. Instead, what I am saying, is that capitalism, and the short-termism that frequently emerges, does not appear to be capable of addressing the world´s most pressing problems. But rather than just protest in the street like the Occupy Movement did, we are starting to witness a new, collective movement of entrepreneurs and citizens aiming to take matters into their own hands by creating new organizational models (or remaking old ones like the platform cooperativism movement) to challenge the status quo and to create a new kind of economy, one that it is frequently more local but at the same time interconnected globally. Can the post-capitalist entrepreneurship movement operate in parallel with, and successfully compete against venture capital-backed and publicly-traded traditional enterprises? Will the PCE movement help us create a more circular, sustainable and just economy in time to avert even worse crises of inequality and climate change? I do not have clear answers to these questions, but I prefer to be optimistic about their chances. How about you?
Boyd Cohen is the CEO of CO2 IMPACT, a carbon origination company based in Vancouver, Canada and Bogota, Colombia. Boyd is also the co-author of Climate Capitalism: Capitalism in the Age of Climate Change.