Over time small changes in complex systems can lead to massive changes in systems. A tiny virus changed to Covid, and the world changed. Gender equality is changing Australia in ways we may not anticipate. The invention of money changed the exchange of goods, and the invention of profits changed it again.
With profits came a change in social behaviour. Selfishness became acceptable and legal because shareholders kept all the profits and did not share them with the customers who paid extra. Selfish behaviour works against group survival, but if the advantages of selfish behaviour are large, it takes time for the problems to appear. Today the effects of selfish economic behaviour are apparent, and many realise change is necessary for the human species to survive.
Change the sharing of profits so that some profit is shared with customers, and economics will quickly change and may be enough for humans to survive.
Two ways to share profits and allow investors to keep their profits are:
- A buyer receives a discount on the next purchase of goods.
- Each product sale includes a few shares purchased from existing shareholders at the time of sale.
The second is simple as it is a book-keeping change at the time of sale. The first is more complicated but still relatively easy to do. The current method of redistributing profits, mainly through taxing profits, is complicated, difficult, expensive and takes money from investors.
For example, sharing electricity profits means consumers receive a small share of new production assets created with their share of profits when they pay for electricity. This leaves the investors with all their original capital and the profit from selling a few extra assets to consumers.
Sharing profits is the most economically efficient way to distribute new capital. Economic efficiency in this context means it is the lowest-cost method of selling assets. It can lead to:
- Less money to make a given investment because sharing reduces working capital.
- More investment from the same money to pay for new shares.
- It increases the value to the community without increasing money.
- Investors do not lose while consumers gain.
- Consumers get shares and receive a voice in governance which may lead to democratic capitalism.
- Recycling and reuse because recycling increases profits by reducing the consumption of raw materials.
- Localisation because smaller groups are more efficient at making decisions on sharing.
- Bottom-up scaling of production efficiency.
However, the simplest and easiest way to bring sharing profits into widespread use is to share the profits from the Banking business of creating money through Bank Loans. Because money and profits are invented, we can change how they work to share without anyone losing. To see more, visit Directing Profits to Sustainable Production. To do something about it, agitate with your local Community Bank to change their loans so they share profits with their members through their loans. Fight against the increasing financialization of our social interactions by supporting alternatives to securitization and monetisation. Finally, think about building and selling a business by sharing your profits with your workers and customers.
Sharing profits can operate with any size organisation; different forms will develop with experimentation. It means innovation and implementation happen in parallel across all local groups.
