Social learning is to ideas what natural selection is to genes. Both are ways of picking out good solutions from a sea of variety. Mark Pagel — Wired for Culture.
With culturally appropriate capital allocation rules, Community Capital is the most productive way to invest. It gives the most value for the least cost.
By contrast, Private Capital provides less value for a greater cost. For example, giving most wealth to one person is a lousy group survival strategy. A world with ten billionaires with more capital than 5,000,000,000 people is a terrible species’ survival strategy.
In the world of climate change, we may survive if we find and can adjust the rules rapidly with the inevitable changes to the environment and technology. With billions of humans changing the environment, there is no magic bullet or plan that will succeed. Our best chance of survival is to use cultural evolution to adjust and discover appropriate rules. It has worked in the past for humans and is our best chance of surviving another 200,000 years.
Variety and Community Capital
For cultural evolution to occur, we need cultural variety. Appropriately implemented Community Capital can provide non-competitive and hence non-violent variety. The variety happens by having many cultural groups and allowing individuals to move seamlessly between cultural groups. Anyone can start a group, and groups can quickly disband.
Community Capital pools the investment money from a group of individuals for a given purpose. The size of the group, the size of the pool of money, and the purpose can change. The number of purposes can vary, and the rules can change. We call such a group a Purpose Co-op (PC) that uses Community Capital (CC). Members can be in many of the same types of PC as an investor member but only one group as a consumer member.
The system encourages variety by allowing individual entities to move between PCs without a cost providing both the entity and receiving PC agree to the transfer. All PCs publish their rules and make them freely available.
Member information in a PC is private and is shared when the PC and the member agree. Individuals can lie, but a PC will likely detect lies about money or constraints in the rules.
PCs follow the Elinor Ostrum rules of group behaviour.
- Define clear group boundaries.
2. Match rules governing the use of common goods to local needs and conditions.
3. Ensure that those affected by the rules can participate in modifying the rules.
4. Make sure outside authorities respect the rule-making rights of community members.
5. Develop a system carried out by community members for monitoring members’ behaviour.
6. Use graduated sanctions for rule violators.
7. Provide accessible, low-cost means for dispute resolution.
8. Build responsibility for governing the common resource in nested tiers from the lowest level to the entire interconnected system.
An essential part of social evolution is competition for resources for survival. We need economic competition as money helps communities survive and prosper. However, there is good and bad economic competition. Destructive economic competition takes resources from one group and gives them to another. Good economic competition increases the available resources and shares, so losers now win.
Community Capital produces life-enhancing financial competition as it increases the survival of winners without reducing the survival of losers. It happens because CC investments reduce the money needed to provide the same amount of goods and services. Both winners and losers can share the increased pie. CC leads to innovations that increase the pie by better using the limited resources of a finite planet.
For example, the burning of fossil fuels increases the short-term wealth of those who produce it while reducing the survival rate of future generations. It burns valuable resources as well as pollutes the environment. In contrast, renewable energy increases wealth with energy production without destroying valuable resources and other resources for future generations.
Community Capital Examples
Community Capital costs little to introduce as it changes the resource allocation rules, not the use of Capital.
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Community Capital as a Social Evolution Tool
This article started with a quote from Mark Pagel. It ends with a YouTube link and a description of why Community Capital might be an economic adaptation that helps us survive.
Community Capital groups are small groups of entities that work together to reduce the cost and resources to produce goods and services. The entities do not compete for resources by taking from other entities in the group but by lowering the cost of production. Everyone in the group benefits from the same rules. The groups concern themselves with one type of goods or service, and an entity only consumes from one group but can invest in many groups. Entities move freely between groups as the social and physical environment changes. Groups of entities combine in a fractal pattern, so the organisational structures remain small, and cheating and lying are relatively easy to detect and correct in non-violent ways.
The groups connect via individuals, and successful innovations to reduce the consumption of resources in one group can quickly spread to other groups for different or the same resources.
The system scales through horizontal fractal structures and the use of the Internet. The small group structure protects the privacy of individuals and fosters innovation and positive competition. It and other cultural adaptations may yet save the human species from self-extinction.