Adapted from Owning Our Future: The Emerging Ownership Revolution, by Marjorie Kelly, available June 4, 2012.
Ownership is the underlying architecture of our economy. Since the dawn of the industrial age, a particular form of ownership has come to dominate our world – that of the publicly traded corporation, where ownership shares trade in public stock markets. The revenue of the largest of these corporations represents roughly 80 percent of global industrial output. Yet bubbling up today are alternative options that represent a new kind of ownership, private ownership for the common good. These alternatives include employee ownership, cooperatives, credit unions, community land trusts, co-housing communities, community wind, and other models. They also include large, mission-controlled corporations, such as family-owned businesses or the foundation-owned companies common in northern Europe.
As a class, these alternatives represent a coherent family of design. If industrial age ownership is based on a monoculture model, emerging designs are rich in biodiversity. They represent economic innovation not as it’s usually meant, which is about better and better ways to make more and more money. This innovation is almost unimaginably more profound. It is a reinvention at the level of organizational purpose and structure. It is about creating economic architectures that are self-organized around serving the needs of life.
We might call this emerging school of design generative. In their animating intent and their living impact, these forms of ownership are aimed at generating the conditions for life to thrive. Should they one day spread to become a new norm, they might create a generative economy, which in its normal functioning tends to create fair and just outcomes, benefit the many rather than the few, and enable an enduring human presence on a flourishing Earth.
Generative ownership designs are about generating and preserving real wealth, living wealth, rather than phantom wealth than can evaporate in the next quarter. They’re about helping families enjoy secure homes. Creating jobs. Preserving a forest. Generating nourishment out of waste. Generating broad well-being. These designs are in contrast to the dominant ownership design of today, which we might call extractive, for its focus is maximum physical and financial extraction. While the industrial age has been powered by fossil fuels extracted from the Earth, that physical extraction works in parallel with financial extraction – the extraction of financial wealth from the economy.
Five essential design elements work together to create these different kinds of ownership: purpose, membership, governance, capital, and networks. These elements can be used in extractive ways, aimed at extracting maximum financial wealth in the short term, or in generative ways, aimed at creating a world where all living beings can flourish for generations to come.
Extractive ownership has a Financial Purpose: maximizing profits. Generative ownership has a Living Purpose: creating the conditions for life to flourish. While public corporations generally have Absentee Membership, with owners disconnected from the life of enterprise, generative ownership has Rooted Membership, with ownership held in human hands. While extractive ownership involves Governance by Markets, control by capital markets on autopilot, generative designs have Mission-Controlled Governance, control by those focused on social mission. Instead of investments that involve Casino Finance, where capital is the master, new approaches involve Stakeholder Finance, where capital becomes a friend. Instead of Commodity Networks, where goods are traded based solely on price, generative enterprises are supported by Ethical Networks, which provide collective support for social and ecological norms.
Not every ownership model has every one of these design elements. But the more generative elements are employed, the more effective the design. Through grafting various pieces together to design still more models, we might together create the greenhouse of design experimentation where the future of our economy could be grown.
The Architecture of Extractive and Generative Ownership
Extractive Ownership Generative Ownership
|1. Financial purpose:maximizing profits in short term.||1. Living purpose:creating the conditions for life over long term.|
|2. Absentee membership:ownership disconnected from life of enterprise.||2. Rooted membership:ownership in human hands.|
|3. Governance by markets:control by capital markets on autopilot.||3. Mission-controlled governance:control by those dedicated to social mission.|
|4. Casino finance:capital as master.||4. Stakeholder finance:capital as friend.|
|5. Commodity networks:trading focused solely on price and profits.||5. Ethical networks: collective support for ecological and social norms.|