Readers of my book were invited to take part in a simple experiment. The $5 experiment examines a core idea of the cooperative economy – that of prosocial behavior. Would individuals be willing to promote the welfare of others at a cost to oneself? The experiment was designed to reveal if participants feel happier giving or rather receiving money.
The experiment was framed as following:
“Find a homeless person or a beggar in your neighborhood or town, and to the extent that you believe that this individual is truly in need, give them five dollars or the equivalent in your local currency. Once you have done so, proceed and meet a colleague or a friend and ask them to give you the same amount of money.”
Based on the 55 anonymous responses thus far, 93% reported feeling happier giving money with only 7% reporting being happier receiving money (see chart).
Of course, there could be a selection bias here because most of those who showed interest in taking part in this experiment are readers of my book who identify the problems with our current economic system and recognize the need for revisiting the principles of economic exchange. They are more likely to be prosocial.
For that reason, it is useful to consider the results of other experiments using randomized samples. For example, Flynn, Ehrenreich, Beron, & Underwood reported in their 2015 study of prosocial behavior in the Review of Social Development, that about 30% of the participants revealed a high inclination for prosocial behavior, 53% showed a medium level and the remaining participants exhibiting low levels of that inclination (see chart).
The fact that most of the population has medium-to-high inclination for prosocial behavior gives hope that by redesigning the economic system we can expect such prosocial behavior to overpower opportunistic behavior.
To learn more about my proposed design, visit www.cooperativeeconomy.net
If you wish to participate in the $5 experiment, you can complete it on my book’s website: https://cooperativeeconomy.net/5-experiment/
The cooperative economy offers a solution to societal grand challenges: economic inequality, dominance of platform ecosystems, overconsumption of resources, loss of privacy and free choice, and drawbacks of globalization. It dismantles the caveats of the modern economic system. Instead of applying a band-aid to treat this bleeding system, it reengineers its DNA, replacing its greed-driven motive with a counter-logic of prosocial behavior. To accomplish this, it must be a grassroots initiative for the community and by the community, supported by individuals who identify with its mission.
The cooperative economy can be contrasted with alternative approaches for revising our economic system. Some expect corporations that have benefited the most from capitalism to promote societal values. Others call for transferring ownership of assets to society in pursuit of democratic socialism. Such approaches are neither practical nor sufficient. The cooperative economy expects communities rather than firms to take the lead and proposes a shift in mindset rather than a change of governance form. It departs from established approaches that have taken utility and profit maximization for granted.
My theoretical ideas may seem progressive or utopian but are in fact pragmatic. I elaborate on the economic model and offer a practical plan for its implementation. I call on my fellow researchers to join in refining and perfecting the system. I extend a call to private financiers who wish to see a return to society to donate and fund such research. I reach out to software engineers, programmers, and algorithm experts who wish to make a difference in this world, please leave your details on the book’s website. Together, we can make this idea a reality that can change the world for the better.
My book, The Cooperative Economy, is available from Routledge or Amazon. For more information visit www.cooperativeeconomy.net
The cooperative economy ensures fair competition by providing new entrants with guaranteed market access and minimum order volume. In turn, stricter controls for quality of vendors, goods, and sustainability targets keep vendors at bay, ensuring consumers’ welfare. Vendors with higher quality receive priority in fulfilling orders. In addition to redefining the principles of economic exchange for vendors and consumers, the cooperative economy promotes protective and respectful employment principles and promotes redistribution of income by reducing salary differences within participating vendors, thus further enhancing economic equality.
Employees, vendors, and consumers are all protected from the platform operator that accepts a restricted position in which it cannot self-prefer its products or services, given that it does not engage in any business other than its platform service provision. To prevent concentration of wealth and power, the system excludes financial shareholders, whereas other stakeholders— consumers, vendors, and employees— receive equal voice in promoting their interests with the platform operator. Eventually, the platform operator would become a federation of platform operators, each serving its local community. In light of this decentralization of ownership and power, antitrust regulation and enforcement can redirect monitoring efforts to the inspection of algorithms, which would hopefully become a standard for all platforms even beyond the cooperative economy.
I discuss these and other design principles in my book, The Cooperative Economy, which is available from Routledge or Amazon. For more information visit www.cooperativeeconomy.net