Once we realize that the failure of our economic system is not due to human nature per se, and that there is merely a design flaw in that system, we can strive for a solution. Indeed, we cannot amend the economic system that is driven by opportunistic behavior, but we can design a new system that is not. The mirror image of opportunistic behavior is prosocial behavior, whereby individuals seek to enhance the utility of others, sometimes at a personal cost, rather than maximize their own utility at the expense of others. Although this seems theoretical, perhaps even fictional, there is evidence documenting such behavior. Experiments suggest that about half of humanity is conditionally prosocial— that is, they will be kind to others if others are kind to them. Acts of kindness are, however, penalized in the current economic system, often met with exploitation and lack of reciprocity. By providing incentives and rewarding those who exploit others, this economic system intervenes and breaks the natural cycle of positive reciprocity. This is how opportunistic behavior drives out prosocial behavior. But the introduction of new design principles can reinforce prosocial behavior while shielding us from opportunistic behavior. Such an underlying force can undo the harm caused by the current economic system, and promote economic equality, redistribute wealth and power, cease exploitation of private data, and restrict overconsumption and abuse of natural resources, while giving more weight to local communities. Unfortunately, these objectives cannot be achieved within the realm of the current economic system. My suggestion is to incorporate the new design principles in a new economic system, which I refer to as the cooperative economy. The Cooperative Economy proposes a solution to societal grand challenges, namely economic inequality, dominance of platform ecosystems, overconsumption of resources, loss of privacy and free choice, and some drawbacks of globalization.
I discuss the proposed design principles in my book “The Cooperative Economy.” For more information, visit the book’s website.
