A recent conference on Platform Cooperativism spurred some thoughts on how FairPay offers a path toward a new convergence of traditional ideas about market capitalism and alternative ideas about a "Fairness Economy." (This conference drew added attention from a Wired article about the idea that Twitter should become a co-op, "Let's Build the Next Twitter Like the Green Bay Packers.")
In exploring the concepts of a more win-win approach to commerce called FairPay, I have seen a spectrum of thinking about market capitalism and its limitations as currently practiced, and how to make our economy more in tune with human social values.
- Market capitalism has created our modern world, and proven efficient, productive, and scalable -- despite a degree of blindness to human values.
- That has led to growing concerns about income inequality, slowing productivity gains, and concentration of power in corporations and investors, spawning a wide range of movements to change the game. These range from
1) incremental steps like "Corporate Social Responsibility," "Creating Shared Value," and "Triple Bottom Lines," to
2) benefit corporations and other more softly profit-oriented structures, and to
3) more sharply different forms of organization like cooperatives (and other non-profits).
- The conference focused on cooperatives, a form of business that has existed for centuries, and harnesses the same spirit as Open Source and Peer Production, and that can now build on the openness of the Internet to put ownership of a business in the hands of its workers and/or customers.
- All of this occurred with a backdrop of the US election, which highlighted deep concerns about an economy that no longer seems to be serving middle- and working-class people well -- a hard push for change, but one with little consensus as to what kind of change can or should be achieved.
The magic of FairPay is that it can be applied in any of these ownership structures. It can work very nicely in alternative structures like co-ops, but can also work as a core operational process in ordinary for-profit businesses. It drives everyday business operations to center on the human values of each customer, in a way that makes it profitable to "do the right thing." No tacking on extra bottom lines, or a veneer of social responsibility, that compete with profit motives. FairPay serves as a kind of cooperative judo that aligns the profit motive with what the customer wants. If the customer is an owner (as with a co-op), that just adds to the alignment.
- Conventional corporations can introduce FairPay into their ongoing operations, as an alternative pricing option -- one that drives a new kind of cooperation between a business and its customers (and they can start to do this in limited, controlled market segments).
- This cooperation focuses on win-win value propositions based on structured dialogs about value that can include broad aspects of value, including "externalities" of people and planet that are typically ignored by our markets (but directly affect the bottom line when FairPay pricing is applied).
- That in itself should improve things for customers, workers, stockholders, and society at large.
- The same kind of cooperative dialogs about value that FairPay creates in a for-profit business can be applied by a co-op or other non-profit or hybrid form, with the same benefits.
- Such methods can be expected to be especially effective in such contexts, because of the deeper alignment of values on the part of the alternative business, and the greater willingness to pay of consumer "cooperators" when the business entity is theirs. (More on this in an earlier post, A Better Revenue Strategy for Non-Profits in the Digital Era.)
- Conventional businesses can become more cooperative and aligned with customer and social values, and help instill more cooperative behavioral norms in themselves and their customers -- even in a for-profit, capitalist context.
- That sets the stage for further shifts toward cooperation in for-profits -- as well as a more fertile environment for alternative structures.
- Likewise, alternative structures (non-profits or hybrids) can benefit from the fair and efficient FairPay pricing process that is more attractive and more self-sustaining than conventional pricing. The power of FairPay may be even greater in such alternative structures -- even if such structures are not as operationally efficient as profit-driven structures in some respects, FairPay might enable them to achieve greater price-efficiency to offset that, drawing on their more inherently mutual incentive structure.
Even better, read my highly praised new book: FairPay: Adaptively Win-Win Customer Relationships.