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

In my previous post I began discussing some design principles of the cooperative economy, which leverages prosocial behavior to promote societal values. One of the means to promote prosocial behavior is restoring a sense of community that supports face-to-face interaction and mutual support among participants in economic exchange. Switching from a global economy to a constellation of local economies minimizes transport distances and makes the value chain less vulnerable while enhancing sustainability. Another design principle is consumption per need rather than consumption per desire. This entails constraining consumption by imposing limits on consumed quantities. For their part, vendors are expected to accept reasonable profit caps, with a balancing process that redirects excess profit back to consumers. These principles represent an extension of the notion of corporate social responsibility to encompass various stakeholders’ responsibilities, including vendor social responsibility, consumer social responsibility, and platform social responsibility. As part of the platform’s responsibilities, and given their destructive influence, advertising and promotion are banned on the platform, and no attempt is made to influence consumer behavior within the system. This is quite distinct from extant digital platforms that apply an advertising business model which is based on driving consumer behavior. Nevertheless, the cooperative economy can be implemented as a set of digital platforms, with technologies involving sophisticated algorithms, machine learning, and artificial intelligence used not to inflate consumption and abuse consumers but to protect users from opportunistic behavior, optimize system parameters, and maximize societal values.

I discuss these and other design principles in my book, The Cooperative Economy, available from Routledge or Amazon. For more information, visit www.cooperativeeconomy.net