Contributionism - An economic model for organisations, an alternative to capitalism

[GeorgeLovegrove]

Contributionism is an economic model built around contribution.

Contributionism focuses on the organisation and how they are owned, governed and incentivised.

Contributionism represents an alternative to capitalism.

Critiques of capitalism

Capitalism is one of the most widely adopted models for structuring organisations across the world.

Capitalism is often associated with a number of economic structures and ideas such as free markets, business, private property, profit motives and wealth accumulation amongst others.

Capitalism is not required for any of these structures or ideas. They could exist and be broadly adopted in other economies that adopt different approaches for structuring the organisation.

Capitalism is focussed on the organisation. Capitalism adopts a share based ownership structure that influences how organisations are owned, governed and incentivised.

A number of critiques can be made about how capitalism structures organisations:

• Flawed justifications for unfair contribution treatment - Earlier contributions are excessively rewarded at the expense of future contributions. Commonly used reasons to justify this excessive reward are not fairly justified.
• Contributions are not respected - Contributions do not need to be respected under capitalism. The common purpose of a capitalist organisation is to maximise shareholder value. Capitalism often leads to a disconnect between contributions and ownership, governance and incentives.
• Flawed share governance and incentive rights - Perpetual governance and incentive rights are a flawed approach that is commonly adopted with shares of ownership. This structure commonly leads to excessive compensation for earlier contributions at the expense of future contributions.
• Fair compensation often requires ongoing gestures of goodwill - Maximising shareholder value can lead to environments where labour is exploited. Workers are often constantly reliant on the goodwill gestures of owners to not exploit their contributions.
• Risk of stagnant ownership and leadership that isn’t collectively accepted - Capitalism can result in stagnant ownership and leadership. Leadership might not be collectively accepted by the contributors involved in the organisation.
• Risk of motive, priority and incentive misalignment - The motives, priorities and incentives of capitalist owners and leadership can become increasingly misaligned with workers.
• Excessive competition - Capitalism incentivises excessive amounts of competition due to the perpetual need for workers to create their own organisations if they want to be fairly rewarded for their contributions.
• Equal opportunity and meritocratic fallacies - Capitalism does not commonly result in meritocratic organisations. Capitalism does not create economies that have equal opportunity.

Capitalism is often rightly criticised for serving the interests of the few and for increasing the amount of inequality across society.

When you review how ownership, governance and incentives are handled under capitalism, you can more easily see how a capitalist structure can lead to these undesirable outcomes.

Capitalism was never properly designed to fairly reward and respect all of the contributions that people make towards an organisation.

Instead, capitalism creates a structure that incentivises the exploitation of future contributions and creates an environment where this exploitation can more easily occur.

Contributionism, an alternative approach

Contributionism looks to resolve the issues that are commonly found in capitalist organisations.

A number of contributions are important to an organisation. These contributions include labour, capital, consumption or donations.

The economic model for contributionism includes 7 key principles that organisations should follow to improve how they are owned, governed and incentivised.

The 7 principles of contributionism include:

• Respect contribution - All contributions should be respected.
• Contributor & public ownership - Organisations should be contributor owned or publicly owned.
• Contributor governed - All organisations are contributor governed.
• Temporary governance rights - Temporary governance rights should be given to all contributions that match the contribution ownership type.
• Temporary incentives rights - Contributions should receive temporary incentive rights so that contributors can benefit from the full value of their contributions.
• Transparent priorities - Priorities should be transparent so that people can contribute towards organisations that they are aligned with.
• Collectively accepted leadership - Leadership should be collectively accepted.

There is a massive opportunity to create organisations with better aligned incentives that fairly respect and reward all contributions that get made towards an organisation.

To properly respect contribution in any organisation, we’ll need to collectively keep getting better at understanding and rewarding contribution.

Contributionism is only interested in broadly defining the most important principles that organisations should follow.

Beyond these initial principles, it is up to the contributors involved in an organisation to decide how they want to operate.

Each organisation could be operated in a large variety of ways. The purpose of contributionism is to suggest the structures for ownership, governance and incentives that should lead to positive outcomes for all the contributors involved in the organisation.

Contributors should feel confident that if they maximise their contribution efforts to generate value and impact that their contributions will be respected and fairly rewarded.

Contributions are the foundation of any economy. Contributionism helps to ensure that contributions are the beating heart of every organisation.

Why is this relevant for Cardano

Contributionism could represent one of the go to models for thinking about how organisations and DAO’s structure themselves in Web3.

Contributionism is solely focussed on how organisations handle ownership, governance and incentives.

The ideas suggested in contributionism should become increasingly relevant for the growing number of organisations that are being started across the Web3 industry.

This economic model was started by outlining some of the fundamental principles that can be recommended to organisations to consider and adopt.

We’re looking to gather feedback to refine and improve upon the current foundations with further analysis and resources.

After that we’ll explore approaches that could be adopted under this model and look at what tools and systems could be developed and used to experiment with this model across Web3 ecosystems and potentially elsewhere.

Next steps for contributionism

Contributionism is being shared widely to everyone that might be interested in giving their thoughts and feedback about the model.

If you know of any existing efforts that might be related and relevant to this initiative then please do share them in the comments.

Right now our focus is just to raise awareness about these ideas and listen to any feedback that people might have!

You can find our Twitter and Telegram on the contributionism website if you wanted to reach out and discuss anything directly.

[COSDpool]

@GeorgeLovegrove I’m happy to hear these principles publicly advocated, since although such ideals often get put down by traditionally materialistic people they would be the basis for a much less antagonistic world than the one we live in today.

@johnshearing I think this could be “related and relevant” to your growing theory of Bioelectocracy & perhaps these 2 systems could get more traction if somehow drawn together.

[GeorgeLovegrove]

They are definitely ideals at this stage! The starting point is just trying to define the north star for what would make a good organisation for everyone involved. The really challenging part is making the different approaches for measuring and evaluating contributions, super difficult but you could have many solutions that people could choose from. That would be the long term idea, that people have a set of options of how they might want to reward contribution in the organisation and collectively they decide which approach makes the most sense for them - such as decision between making cooperative or competitive environments.

Happy with this as a good starting point though! Links together with my other pieces of analysis and where I hope we could be heading

[johnshearing]

I had a look at your website @GeorgeLovegrove,
Very interesting! Thanks for all your hard work!

I have been looking to nature for ideas about governance which seems mostly about allocation of resources. So it applies to this conversation about Capitalism vs Contributionism.
Here is a cool video about how bees make collective decisions. The most interesting thing about the bee’s decision making process is that no bee knows much about the collective decision making process. The intelligence is in the group structure, not in any individual bee.

As it turns out, even collections of single cells are quite intelligent and make collective decisions.
Here is a cool video about that.
Again, all the intelligence is in the group structure, not in any individual cell.

Finally, This video shows a solid link between “honest” capitalism and the process where by groups of cells make collective decisions. The idea is that all the intelligence is aggregated in the prices without any record keeping and that best collective decisions are made by the intelligence in the collective and that ideally the individuals know nothing about the decisions being made by the collective.

Of course, there are a million ways to manipulate prices in a human economy as seen in this video whereas there is less opportunity to cheat at the cellular level of life. This is why cells do a pretty good job of maintaining the whole organism while capitalism doesn’t seem to work.

The takeaway for me from all of this is that an honest and accurate price system allows everyone to feel everyone else’s stress as if it’s their own. So what I am looking for is novel ways to increase the scope of who we consider to be our neighbors.

[GeorgeLovegrove]

Thanks for the links, I’ll go through all this properly when I can!

[GeorgeLovegrove]

Some really interesting presentations! This is something I was thinking about when writing contributionism is how unnatural capitalism is, try to apply it to a relationship or a game of football and it doesn’t make much sense. Contributionism on the other hand is more focussed on the importance of contribution in these environments where people come together. A relationship between two people will usually involve different contributions that each person makes that they both are looking for in that relationship. When someone stops contributing or there is not a match in expectations the relationship can become more problematic or break down entirely.

I think the wording in the principles could be improved to try and be more specific that if this organisation involves monetary exchange to pay for contribution efforts then these specific principles apply, as in casual groupings of individuals people contribute for a variety of reasons and how contributions are respected can be very different in these settings.

Contributionism should feel like a natural way for people to organise themselves. Importantly I don’t want the model to be biased about one way of working, competing or collaborating to be more important and relevant than any other approach. People can collaborate how they want and they may even decide to do that in ways they fully know aren’t as effective - they may just want to do it out of spontaneity or for the fun of it. Nothing wrong with that. Another example is leadership, i think this is perfectly natural and expected thing in certain settings. Just like a football team may decide to have a captain that may have some influence on how people play the game, other teams may not use that role at all. Same thing for organisations, leadership may or may not exist, and how it exists if it does is up to the people involved.

So contributionism should stay as minimal as possible but look to encourage any variety of ways that people could decide to come together and create their own forms of collaborative hive intelligence, and that could be because its fun, logical or that the group just prefers it in a certain way. I see a lot of joy in the plurality of approaches that an organisation could take and how peoples preferences could change over time as they age or based on their experiences and preferences. Contributionism can just focus on the core fundamentals of what to avoid that leads to undesirable outcomes and what principles help with making a functional organisation.

Another benefit of contributionism is it creates organisations that can last for eternity as contributions should be respected and rewarded fairly from start to finish. Contributions are not being rewarded in perpetuity. The infinite governance and incentive right share structure in capitalism makes this more difficult for an organisation to survive when it does happen it often is an environment that more commonly will be exploiting future contributions.

[Terminada]

Wow @GeorgeLovegrove you have contributed a lot of work on your linked website.

No doubt the invention of the company structure has provided many benefits across time in scaling human association towards a common business goal. However, as you point out it has also caused many problems. Your site outlines problems resulting from capitalism but maybe many problems result from the company structure?

I think the last line on your site is prescient: “Web3 could represent a high growth area for the adoption of contributionism.”

This is where I think everything is headed too and AI is bringing the timeline forward. Don Tapscott outlines this vision well in a recent Cardano interview: https://youtu.be/Vl1fPEwkD3I

I think blockchain and smart contracts provide the tools to scale decentralised trust and disrupt the Company structure. The company structure was good for a long time but society can do better now.

This future can allow current Amazon suppliers to ditch Amazon company and use smart contract systems for organisation instead. Each supplier will be able to set their fees for what they are contributing and pay fair contributions to other service providers they require to operate. No longer will such companies act like a funnel delivering money to those at the top. Once we control our own data and can use AI agents under our control, then we have the means to scale all this. We can all be rewarded for our individual contributions.

Though, we also need governments to outlaw most patents, especially software patents, and put reasonable time limits on others, because this is another value extraction method used exploitatively.

[GeorgeLovegrove]

Yeh it’s the way to think about it, small and big business is not inherently good or bad, it depends on how it is structured and operated, this is what will influence the actual outcomes. Capitalism just naturally leads to outcomes that reward a minority of the contributors involved and serves their interests above other contributors within the organisation.

Quickly watched the interview and yes he briefly outlined the important of rethinking the corporation.

I haven’t been a fan of token based DAO’s creating lots of smaller economies as the tokens are often not required for the protocol and application to function and it creates weaker aligned incentives to contribute towards the wider network. I’m a much bigger fan of Web3 ecosystems like Cardano and others adopting demurrage through a wealth tax which then perpetually funds a treasury that can pay for ongoing open source development. This approach is far more desirable due to better alignment of incentives and flexibility of contribution - Idea token vs contributor network funding | Treasuries

On the Amazon example, exactly that, the tech just removes a lot of middlemen and puts that security and trust into code. Marketplaces can be replaced with protocols that facilitate the same exchange and provide optional mediation and resolution services if there is a dispute. Attach self sovereign identity and people can more easily build reputation and trust for making transactions with people for different products and services.

[Terminada]

Also, these zero knowledge proofs are magical and have the potential to unlock human flourishing in other ways, such as medical research. For example, I would happily provide access to my medical records and live data from monitoring equipment, if the data was owned by me, use protected by ZK technology, and a share of any benefits accrued back to me.

[Immortal]

This is pretty much aligned with what I’ve been working on for years already. Several communities have successfully piloted the protocol I present in my Catalyst proposal.

It’s even called Respect Games:

https://cardano.ideascale.com/c/cardano/idea/129884