Building Efficient Markets

The Design of an alternative market.

Setting prices is difficult. In designing an alternative market we can design a market that does not have to set a price. Instead, use a price from the existing energy market as the reference point.

  • Existing members invite new members and the cooperative approves new members who accept the invitation.
  • Use all the existing systems of exchange of value. They already exist and they work well so leave them in place.
  • Give the ownership of the assets used in the market to the cooperative. By having buyers and sellers in the same cooperative the distribution of profits and setting of prices within the cooperative is determined by negotiations within the cooperative rather prices being discovered in a wider market.
  • Give members a continuously updated right to the assets of the cooperative in case the members decide to terminate it.
  • Specify a fixed return for the seller and the investor when they participate in the market. This will remove the ability of investors and sellers to take profits from the market before the market generates them and so prevents members from becoming rentiers.
  • Specify the obligations of the cooperative members and ask members to find another cooperative if they fail to keep their obligations.
  • Do not allow the use of financial products, such as loans or capital gains, to increase the amount of money in the market. This prevents any value from being extracted from the market before the exchange of goods and stops all participants from using the market to profit from price speculation.
  • Give returns on investment by giving buyers discounts when goods are exchanged. Do not allow the trading of discounts separately from the assets owned by the cooperative. This prevents the market from generating speculative returns and prevents rentier behaviour.
  • Keep the cooperatives to human manageable numbers so there are close human connections and commonality of purpose.
  • Use information system platform cooperatives and common administrative systems to make it seamless for individuals to move between cooperatives.
  • Administer cooperatives through cooperatives of cooperatives to reduce costs and to scale information systems.
  • Provide ways for cooperatives to vary their internal rules to meet challenges created by the external environment particularly the regular market in which their members live.

Products and Services suited to cooperative markets.

The easiest markets to use cooperative markets are natural monopolies and local commodity markets. Examples are electricity, water, transport, education, health, and food.




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Kevin Cox

Kevin Cox

Kevin works on giving individuals control over their online information - particularly their financial information with local communities.

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