Thursday, December 18, 2008

Spreading the Creation: Civic Economy

...an economic system which is beyond capitalism, that is a system which enhances the participation in the creation of wealth, not only its accumulation.

Civic economy can be defined as the economy resulting from generalized repricocity, from people helping people to succeed, with the understanding that the well-being of each member of the community is to everybody's advantage. Whereas unbridled capitalism destroys diversity, competition, and ultimately the market and has to be controlled with anti-trust laws, civic economy encourages diversity and supports small and medium companies and cooperatives with legislative and fiscal tools.

The result is an entrepeneurial economy where repricocity matters.

Ernesto Sirolli,
from the Epilogue of
Ripples from the Zambezi: Passion, Entrepeneurship and the Rebirth of Local Economies

Civic economy is a way forward for a healthy, dynamic, prosperous Memphis.

Detail, Artist's Yard, Cooper-Young

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12 Comments:

Blogger Ganja Blue said...

I have to object to the logical fallacy:
"unbridled capitalism destroys diversity, competition, and ultimately the market and has to be controlled with anti-trust laws"
You see, monopolies can only exist with government charter. Corporations are a creation of the government. Think of the largest monopolies in existence and I'll show you businesses that are and have been protected and regulated by government. From the railroads, to the telephone, to modern software, the government is heavily involved in every sector in which a strong monopolies exist.

Allow me to use Microsoft as a current example. While not a true monopoly, Microsoft's biggest collective customer is the Government. They thrive on government contracts, education, administration, health care, defense, ad nauseum. To strangle small firms even more a completely the patent system has been bastardized to protect their business model. Instead of protecting innovation, this new patent system now stifles it. Microsoft is also a chartered corporations. By chartering corporations, the government shields the executives from the consequences of their personal actions. Without accountability these executives are free to make harmful, destructive, and unfair decisions.

It is not the "free market" that causes these problems. The free market IS diversity, it IS the economic definition of "perfect competition." In a free market everyone is equal and everyone has equal opportunity. We don't have and have never had a free market in the United States. It is the regulatory burden that makes things easy for corporations with legal teams and it's regulation that makes things tough and expensive for us little guys.

Thanks for letting me use your blog for my soap box.

9:28 AM  
Blogger Aaron said...

Love the quote. A great definition for the "new economy."

Indeed the regulations are stifling, hence the need for a civic economy where the government facilitates for the little guy rather then squashes him with regulations that favor the big companies.

4:04 PM  
Blogger PeskyFly said...

Blue, I don't see any logical error in this thinking. Repricocity is the missing element. It's a foreign notion outside of the marketing department.

9:08 PM  
Blogger PeskyFly said...

To wit, some good legislation aimed at the Credit Card Industry:

http://www.commercialappeal.com/news/2008/dec/18/regulators-adopt-new-credit-card-rules/?partner=RSS

9:15 PM  
Blogger gatesofmemphis said...

Ganja and Pesky, thanks for the comments. Aaron thanks for that and your original recommendation.

Pesky, your comment about missing repricocity in the credit card industry came on the same day as this this post by one of my favorites, Umair Haque. Great minds and all that...

12:41 AM  
Blogger PeskyFly said...

Today's thought: CEOs make 400-times what a worker does but Unions are the devil.

All this gives me an idea for The Pyramid:

The Invisible Hand Museum of economic snakeoil. First exhibit: unsustainable models and outright schemes.

12:12 PM  
Blogger gatesofmemphis said...

Pesky, I've been thinking about your idea and even went to the PT Barnum wikipedia entry because of it. A Pyramid that combines the brash showmanship and luridity of Barnum's American Museum with Houdini's skepticism.

9:09 AM  
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Blogger sarah said...

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10:03 PM  
Anonymous ernesto sirolli said...

Ganja Blue

I agree with you. It isn't the free market that is the problem. In my quote I said: "Unbridled capitalism destroys diversity, competition etc. not the free market". There is a tendency to confuse FREE MARKET with CAPITALISM and I don't understand how this can be. Free market is probably as ancient as humanity itself whereas Capitalism is only as old as the existence of surplus capital. Nobody had any surplus capital to invest as early as the 1600. Before that maybe a few families, the Medici and the Rothschild’s, had enough surplus capital to lend to kings and queens, but 99.99% of the European, not to mention the world population, had no surplus capital to invest.

Capitalism is NEW! And we are still learning what happens when it is left unchecked.

In my book I make the case for a “civic economy” that promotes entrepreneurship. I believe that one million small businesses employing 2 people each is better that one business employing 2 million people. This is because if that one big business goes bust the economy looses two million jobs. Do I advocate smallness? No. Certain businesses have to be big for scale reasons. But to have all the chicken in the USA produced by one company, or the beef, the cars and the software would be suicidal. Fortunately in the USA there are anti trust laws that protect us from unbridled capitalism. And to be protected from it we desperately need because we cannot allow the free market to be destroyed whether by communism OR by unbridled capitalism.

3:11 PM  
Blogger Ganja Blue said...

When I talk about Capitalism I'm using the the term as defined by Ayn Rand in "Capitalism: the Unknown Ideal." The primary difference between capitalism and the free market is government protection of capital. Both are free of economic regulation, but in a capitalist system you should have an objective government ready to arbitrate contractual disputes, or investigate and prosecute in the event of theft or fraud. I guess it's just semantics but I think Capitalism as defined by the current economic crisis is actually merchantilism, corporatism or even fascism.

10:30 AM  

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