In 2012 Doc Searls wrote “The Intention Economy — When Customers Take Charge”. He made the case that an economy where buyers would make their intentions known to possible suppliers would lead to open markets, lower prices, higher quality and a more efficient economy.
At about the same time, I left Edentiti, a company I had founded to provide individuals with control over their electronic identity. The company changed with new ownership. It became an identity provider to businesses and lost its original objective. It was a sensible commercial decision as, under a different name, it supplies over 50% of paid identities to organisations in Australia and NZ. Unfortunately, as we have seen with recent security breakdowns, you cannot trust others to look after your identity. You are the only one you can trust, and even you need the mutual support of several others you can trust.
I attempted to fulfil the original vision in a new startup but could not find the finance. No investor was willing to part with money to give individuals control over their identity. Investors know that access to a person through their identity is a pathway to high returns. Today we are identity dependent on various tech giants, businesses, and governments who use access to us to control us and to extract money.
Why couldn’t I find the funds to implement a secure identity system owned by individuals? One reason is that buyers of identity want to keep all the profits to themselves, and the buyers of identity are investors in the companies who were the buyers. Investors want to keep the profits from investment to themselves and not share with the rest of the population. They are aided by the laws and regulations of modern societies that are structured to make it more costly to invest the less money you have.
To solve the problem, we need ways to level the investment landscape. It should cost the same to invest no matter how much money you have to invest. However, that is not enough. Those who use a product should automatically become an investor in production.
Making investment available to all solves many social issues and will provide enough investment to keep the planet liveable.
The Nature of Capital
Capital is a broad term that can describe anything that confers value or benefit to its owners, such as a factory and its machinery, intellectual property like patents, or the financial assets of a business or an individual.
While money itself may be construed as capital, capital is often associated with cash being put to work for productive or investment purposes. In general, capital is a critical component of running a business from day to day and financing its future growth.
An Economy with the Intention of Survival
In 2022 we need an economy where the intention is the survival of the human species, where we can work together and contribute to our survival.
We have seen little or no progress towards the Intention Economy because the boards of companies, bureaucrats in government, and executives of companies all like the system where the highest-paid people tell the rest of us what is good for us. They have inherited a top-down system and want to keep it that way.
Revolution is no solution because it throws up leaders who think they know best and tend to be worse than the previous leaders. An evolution of the existing system will work, and we can do it one business at a time.
One way to evolve the finance system is with Community Capital, where the community served by the business supplies most of the Capital and receives most of the profits from the business. Businesses financed by consumers remove the cost of interest, dividends, capital gains and Capital Markets. In commodity markets, buyer-financed businesses can normally outcompete shareholder-owned businesses because of lower finance costs.
However, shareholder businesses have economies of scale. Buyer-financed businesses can counter with standard processes and procedures across multiple levels of coordinating businesses with a bottom-up franchise arrangement. A bottom-up franchise is one where the stores own the organising franchise business.
The Dynamics of Community Capital
Community Capital for commodity products will create a dynamic self-adjusting system of interlocking businesses where buyers will move freely between the businesses. The businesses generate Capital intentionally and use the Capital to benefit the community. For example, a Permanent Housing Market Community might decide to spend its profits on reducing the consumption of fossil fuels.
If some members of society have less access to education facilities, higher profits in the education sector for some students can supply the funds for those with less access. It works because the institute gets higher profits from some who can afford it while giving to others. We do it today with scholarships, and with Community Capital, it becomes routine.
Competition will flourish because innovators in one community can be paid for the innovation when it moves to other communities. Both communities benefit, and neither loses.
Prices will stabilise as society finds the cheapest way to produce products. If they increase due to external situations, the extra profits go to the whole community through the distribution of profits to buyers.
The system reacts immediately to business environment changes.
Instead of a dysfunctional Capital system that produces more and more money for fewer and fewer, we can have an intentional system. The intention can be to direct profits to ways to reduce consumption and the load on the planet while increasing value to all.
We can evolve a survival economy because it is something on which most of us agree.
