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I would like for you to use your imagination with me for a moment. Consider the following:
Imagine America was a startup and was starting over from scratch. After understanding the systemic problems of the economy, how would we design a new economic system that’s focused on sustainability, created a level playing field, and enables people to engage in a form of autonomous work that is aligned with their talents, values, and purposes?
Imagine an economy…
– with no employees only worker-owners, where all workers experienced ownership in the companies they were a part of
– with no poverty, unemployment, and money-related crime
– with no financial crashes
– with an educational system that was personalized to each student, fun, engaging, and stimulated left AND right brain learning
– that brought back the apprenticeship model and had a strong support network to nurture students’ growth
– where goods and services were sourced locally or as close to the community as possible
– where we personally knew who we were doing business with
– where local residents were intimately and more directly involved in how public funds were allocated
– where a continuous source of capital was accessible to startups and established businesses that put business & community sustainability at the heart of their operations
– where people and businesses intentionally combined their purchasing power to drive costs down for their everyday needs
Does this sound too good to be true? I understand if it does. We’ve been stuck in an old game for centuries and we only know what we are exposed to. The concepts I’m going to share blew my mind once I became aware of them. I was surprised as to how this information wasn’t taught in the majority of schools and didn’t receive as much media coverage as the financial crisis we are in. Then, I remembered that the status quo is kept in place for a reason.
In late 2011, we saw what the Occupy Movement did. People finally came together to show the world that they were tired of the economic and political inequalities. To use a business analogy, I look at Occupy as the “PR Campaign” of the movement towards economic change. It helped people become aware of the problems and begin creating dialogue around them. However, there wasn’t a coordinated effort to create a comprehensive solution that addressed the systemic problems of our economy, or using the business analogy example, no “sales” were being made; which keeps the “business” sustainable and operating.
Many anti-capitalists proclaim Socialism as the answer (Note: I support the original aim of Socialism by Robert Owen, not the current version). Unfortunately, many people don’t understand that in our current economic system and in Socialism, there is only one monopolized currency that can be accepted for taxes, which is created out of compound interest debt, and is the root cause of our unsustainable economic system; currently, the private sector has a monopoly on legal tender like the government does with Socialism. So, by instituting Socialism, we might change the “driver” of the “car,” but the root problem still exists so constant “repairs” or corporate bailouts are always going to be needed. Essentially, we can’t meet all of society’s needs with only one, monopolized currency, the same way only one form of plant life can not be sustainable for a forest or jungle. We need a diversity of currencies just like nature needs diversity of plant life to be stable.
Many anti-capitalists also feel a bloody revolution is needed. But let’s get real, the U.S. government has too many resources at its disposal; spending more on the military than all other developed nations combined. So that’s not an intelligent decision. Many well meaning citizens feel change can be made within Washington. Unfortunately, as history shows that isn’t going to happen either. What is there left to do? What if we agreed to play a new game instead? One that doesn’t break any laws, is opt-in, and fills in the gaps left by the old game. It wouldn’t require a revolution that sheds blood, but the shedding of economic ignorance…Essentially, it requires a revolution of the mind.
We dare to imagine an alternative and act on it
Producism is an evolutionary economic model that is designed for the Digital Age. It combines 11 new economic concepts for the goal of revitalizing local economies and communities in a fun and easy way. I say easy because an economic template has already been created for us with the old game. The hard work has been done, we just need to add a few tweaks to get it right (I’ll get to the fun part in a minute).
Let me make this very clear, Producism is not a new extreme. It is about balance and integration – filling the gaps that are remaining in the current economic system as a means to enhance the best practices that are already existing. It’s about bringing in the parts that have been left out to balance the whole. This is not a new extreme, it’s a new balance. You have Socialism on the left and Capitalism on the right, and Producism in the middle.
It is an economic science, not an economic philosophy. It focuses on how to repair local economies, not why the problems exist. It’s a way to convert individuals’ anger toward “The Man” into something productive. It’s about replicating an economy that’s been sustainable for ages, nature. It’s about imitating a living cell that’s in our body (a cell produces more than it consumes, which is sustainable for our body- a cancer cell consumes more than it produces, which is unsustainable for our body). It enables local communities to create their own stimulus packages. Esstentially, you can think of it as a decentralized social capitalism that is focused on localism, creative sustainability, and collective economic empowerment. It provides a way for people to self-organize a new, parallel economy that is locally-based and globally-connected. And last but not least, it enables those who choose to participate, to become an impactful social entrepreneur to eventually self-actualize in a sustainable world.
The Producism Principles
– People experiencing ownership and self-sufficiency; especially in a form of work that an individual has a passion for
– Profit not holding more importance than people and the environment
– Enterprise providing exceptional value to its customers and teammates/shareholders while making substantial investments in making the world a better place
– Community currencies filling the gaps left by national currencies
– The commons not being commodified
– Society replicating the same principles as nature’s economy for its money system as a way maintain sustainability
– Human happiness can only be achieved when both spiritual and material advancement happens
The 11 Concepts of Producism
Jane McGonigal: Gaming Can Make A Better World – TED Talk
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From countless hours of research, I’ve found that an effective way of getting people to learn and adopt new concepts is through a strategy called gamification. Gamification is using the art of game design to motivate behavior for a desired outcome. It involves the practice of adding game mechanics (such as points, badges, levels, leaderboards) and game dynamics (missions, tasks, quests that lead to rewards) to an experience so it’s more fun and engaging.
As stated in a previous chapter, we are already playing a game in life. People and organizations act as the players, the points are money, the badges are material wealth and credentials, the levels are socioeconomic classes, and missions are work schedules and a variety of other tasks. Just as urban planners design city spaces to create positive benefits for local residents, game designers can create reward programs to encourage positive behavior. Politicians already do this with tax incentives, but digital technology and social networks can create an opportunity to utilize this approach in even more powerful ways. This is a gift and a curse, depending on how it is used. I say that because gamification is highly aligned with Social Engineering, and history can show us the dark side of that. Take note of the quote below:
“Games are the only force in the known universe, that can get people to take actions against their self-interest, in a predictable way, without using force.”
– Gabe Zichermann
Happy hour is a good example of a game dynamic. The bar doesn’t force you to come to their establishment, they offer you a discount (a reward) and you voluntarily arrive there. If a person or organization can continue these type of experiences, they are subtly guiding you on a journey for a desired result, whatever that may be. With our current economic system, where do you think the journey is leading the majority of us? Do you want it to be off the “fiscal cliff” or towards collective prosperity?
Games are also known to spur certain motivations within people. The old game mainly focuses on extrinsic motivations such as material possessions, but what about intrinsic motivations such as happiness? I’ve heard numerous instances where people have enough money to last 10 generations, but they are some of the most miserable people. What if we start with the intrinsic motivation first, by seeking a form of work that makes us happy and provides value to other people, allowing extrinsic motivations to be the result of that? In the old game, we start our search for happiness from the outside in, instead of starting from the inside out. However, if you study nature and notice how a seed grows, it always takes the latter. We are like seeds ourselves but we’ve been taking an unnatural approach to our lives because we’ve been led on a journey that’s against our self-interest!
Many people resort to playing video games to escape everyday life. The best games have been found to enable players to experience autonomy (choosing their own path), mastery (continuously developing their skills), and purpose (having an epic meaning behind what they do). Dr. Andy Przybylski, a contributing researcher into why people love to play games, says:
“A game can be more fun when you get the chance to act and be like your ideal self. The attraction to playing video games and what makes them fun is that it gives people the chance to think about a role they would ideally like to take and then get a chance to play that role.”
The study looked at players’ emotion and motivation to play and found that the enjoyment element of video games were higher when there was the least overlap between someone’s actual self and their ideal self.
What if we created a real world game that challenges players to intentionally go on a journey to self-actualization and reach their ideal self? The old game only enables a tiny minority to reach this destination, but the new game can help every player get there IF enough people AGREE to play. An important thing to remember is self-actualization happens when both intrinsic and extrinsic motivations are reached.
I feel if people spend the same amount of time they do playing virtual games, like Farmville and World of Warcraft, on real world games to develop social enterprises they’re passionate about, our local economies and communities can be revitalized in a fun way. My hypothesis is Producism provides the framework for that to happen.
“Everybody is a genius. But if you judge a fish by its ability to climb a tree, it will live its whole life believing that it is stupid.”
– Albert Einstein
Today’s educational system seems to have a purpose of producing job seekers. However, a lot of college graduates are either finding dead end jobs not related to their passions or no jobs at all. If they are investing thousands of dollars in tuition and other school fees to become good job candidates in their chosen fields, but are coming up empty handed in their job search, their return on investment is failing. Instead of taking a reactive approach, which has been the norm, I suggest taking a proactive stance: if students aren’t finding jobs, they need to create them. This restructures the purpose of education to produce job creators instead of job seekers. But how do we do that? There are a variety of concepts I would like to share with you, and if consolidated into a comprehensive model, has the opportunity to not only transform the educational system, but the economy as well.
A student’s experience with the educational system begins in the early stages of elementary, where their acclimation to school begins. If they have a nurturing experience during this stage, the chances of success in the future is a lot higher. We need to observe students’ learning styles and cater to them. Some students are visual learners, some need to hear words over and over, while some need a form of physical activity. By grouping students based on unique learning styles, it can help them become collaborative learners. However, by delivering teaching lessons in a variety of formats – visual, auditory, kinesthetic, it engages various human senses and has a higher chance of being remembered. Furthermore, studies show that the best way to remember something is to teach it to someone else. By flipping the classroom and having students become teachers, not only is it taking some of the burden off the professional teachers, but it’s a more engaging and effective way to learn. What is an effective way to personalize education and to incorporate a more collaborative approach to learning? Games come to the rescue again!
School teacher, Ananth Pai, brings video games to the classroom – Gamification Summit
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Game-based learning, I believe, is the holy grail of education for the fact that games can turn boring class work into play and encourage students to take initiative in their learning. As mentioned before, games (when done right) allows students to experience autonomy, mastery, and purpose in a fun way. Games can be personalized to each player (autonomy), challenge students to enhance their skills (mastery), and find epic meaning behind their actions (purpose). Regarding the educational goal to produce job creators, studies at The Education Arcade at MIT, have shown that game players experience the same things entrepreneurs do – persistence, risk-taking, attention to detail, and problem solving. By getting students involved in playing educational games at a young age, we are indirectly training them to have the mindset of a job creator.
A great case study of game-based learning has been conducted by Ananth Pai, a 3rd grade teacher in Minnesota. He stated:
I believe human capacity alone can not solve the learning gap in our educational system where some student to teacher ratios are 20 to 1. I feel technology can help students become independent learners by connecting to the Internet to find educational content from around the world and guiding them to reach their learning goals. By using digital-assisted, game-based learning, in a 4 month period the class went from a below 3rd grade to a mid 4th grade level in reading and mathematics.
Games help students learn at a faster rate than traditional methods because of the feedback loops embedded in games, such as finishing tasks and getting rewarded in real-time. These actions produce a pleasurable feeling in our brain from the chemical dopamine. Our brains are wired for games. The potential of using game-based learning in all educational levels is enormous!
In addition to game-based learning, other enhancements are needed. Teachers should fully utilize the potential of online courses such as Khan Academy with their students. This will enable teachers to focus on acting as coaches, mentors, and facilitators, and lessen their burden as well. Education needs to stimulate both left and right brain activity. We need to keep our child-like imagination alive as we progress in life, for it encourages out of the box creativity, which is needed during these challenging times. We need to look at failure as a good thing in education because it encourages experimentation and learning; failing fast to identify more optimal solutions. There needs to be a focus on practice, instead of theory, by students learning by doing, while simultaneously understanding how the knowledge they’re gaining can be applied to the real world. Most knowledge suffers from atrophy because it is never used in everyday life. Today, there’s too much input of knowledge and very little output of it, such as critical thinking and creativity.
3rd-5th Graders Creating a Mini-Economy
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Technology is increasingly replacing jobs that mainly require memorizing information, following instructions, and doing repetitive tasks. Tomorrow’s economic opportunity depends on students being creators, and teachers tailoring lesson plans for that outcome. A way for schools to get students into more practical ways of learning is by setting up sandbox marketplaces or mini-economies, such as Microsociety, this example in the Rainmakers documentary, and 3rd-5th graders creating their own economy in Richmond, Virginia. These programs involve students creating their own bank, currency, businesses, and agencies – or essentially, their own economy. They get to learn important financial information and have a better opportunity of forming positive habits that lead to becoming job creators. This can also help students build an online portfolio of the work they’ve done during their educational journey, and also see how much they’ve progressed.
Regarding K-12 education, there needs to be other comprehensive options for parents to offer their children. There’s so much red tape in the educational system that making any major change can discourage a lot of well meaning attempts at enabling reform from within the system. Just like people can create their own money, people can create their own schools. Home schools have been a highly underserved market segment, but with today’s technology combining the digital world with the real world, there’s a tremendous opportunity to bypass the slow moving, traditional educational system the same way startups like Uber and AirBnB bypassed their respective industries.
Imagine a home school social network that utilized the Education 2.0 approach that I’m advocating. Consider it using game-based, online courses for learning content, and college students and recent grads that’s passionate about education, acting as facilitators in the homes of the students (a model similar to Teach for America), and included ways to bring students together in person via different activities around the local area and local college campuses. That would bypass the need of having a centralized location such as a school building and all of the bureaucracy. Parents would also play a bigger role in how their children are educated. Of course, they’re a lot of other things to consider, but if we can build a spaceship to reach the moon, I know we can definitely put our minds together to create something like this.
MOOCs (massive online open courses) such as Coursera and Udacity are also providing alternatives to taking college courses without paying high tuition fees. This is a great approach to self-directed learning. Nonetheless, I can see a similar home school model, as described above, for post-education as well.
Bringing back the apprenticeship model would be a great alternative too, which a startup, Enstitute, is already doing. As stated on their website, they are “turning startups and small businesses into classrooms.” Apprenticeships help people obtain real-world job experience such as connections, various skills, and practical application. One of the co-founders, Kane Sarhan, believes no one should have to go into debt to find their career path. I wholeheartedly agree!
Having schools create knowledge inventories is another good step in the right direction. I was introduced to this concept by an associate of mine, Dan Robles, of The Ingenesist Project. A knowledge inventory is an online platform that makes it easy to find people in your area who are knowledgeable (on a sliding scale) about a particular subject. Knowledge is grouped under three types of categories: intellectual, social, and creative. Intellectual knowledge is based on the ability to share facts about a particular subject. Social knowledge is based the ability to communicate and bring groups of people together for a desired outcome. Creative knowledge is based on the ability to take the existing parts of something and turn those parts into something unique. Dan Robles advocates that if you can put those three types of knowledge together, you can create an “assembly line of innovation,” thus streamlining the process of creating startups. It would also make it easier to predict success within startups and create more funding opportunities for them as well.
Furthermore, our minds are like computers, it only spits out what is put into them. For a computer to complete various tasks, different programs need to be installed onto it. Computer programs are just like human habits. Therefore I feel it is safe to say that the educational system is in the “habit forming business.” The habits that today’s educational system is forming were good for the 1950’s, when people sought to work for one company for 30+ years. But for the 21st century, we need to form new kinds of habits that are relevant to this time period, and producing economic opportunity rather than seeking it, is what’s needed in the educational system today.
An alternative currency is any currency used instead of national fiat money such as the Dollar or Euro. They can be created by people, organizations, and national/state/local governments. They are created to complement national currencies, not replace them. They can also be used in combination with national currencies. The next chapter is dedicated to this topic so I’ll go into more detail there.
Demurrage is a cost for holding currency over a given time period. It’s a negative interest rate. It is utilized to keep money circulating within a community, and is usually applied to alternative currencies. This will be explained in more detail next chapter.
Crowdfunding is a process when people pool their money together, usually via the Internet, to support projects initiated by other individuals or organizations. For example, you need to raise $10,000 for your startup t-shirt business. You can join a crowdfunding site like as Kickstarter or IndieGoGo, and post what your business is about. Supporters can then pre-order t-shirts and play a part in helping your start your business. Over $1.5 billion has been contributed to new ventures in 2011 alone. I believe this is the future of funding projects.
Startup and established businesses have 3 ways to raise money: debt, equity, and royalties. Debt and equity are the most common ways to raise money today.
However, getting a business loan and going into debt is risky for entrepreneurs because if your business doesn’t make any sales, you still have to pay back the loan, and if not, the business goes bankrupt. A bank doesn’t care if your business succeeds or not, it just wants its money back, plus interest. You can also get loans from friends and family, but you risk straining those relationships if things don’t work out the way you intend them.
Raising money by offering equity in your company is another option. However, this option has a few drawbacks depending on the situation. Going this route is good if your business is planning to go public or be acquired by another business. Offering equity can also give investors control of the company, depending on the type of deal reached. Furthermore, you can only publically market your investment opportunity to accredited investors who have a certain net worth.
Royalty-based financing is another way to raise funds. It involves getting an investment and paying it back through future sales. You don’t have to give away significant control of your company and you can market the opportunity and raise funds from anyone who agrees to participate. Since royalty agreements are seen as loans, they aren’t subject to state and federal securities laws as some equity financing deals are.
An example is raising $100,000 for your startup business in exchange for a 10% royalty from each sale your company makes until the investment is paid back 2.5 times. Royalty payments are usually paid monthly or quarterly so it enables investors to begin seeing returns immediately instead of waiting for a company to go public or be acquired. However, these type of deals are only good for businesses that have traceable sales.
A social entrepreneur is a person that creates a self-sustaining venture that is driven by a social or environmental cause. While most traditional entrepreneurs typically measure performance in profit alone, a social entrepreneur takes business and social or environmental sustainability into account. You can also say social entrepreneurs create for-profit companies with non-profit souls. They don’t have to depend on donations and grants to operate, they provide a valuable product or service to the community and channel profits toward the change they want to see. It follows the motto, “Doing well by doing good.” Social entrepreneurship is about using enterprise to build better places, communities, and improve lives.
These statistics on the Cause Marketing Forum will enlighten you on the demand social enterprises are creating.
According to The Great Social Enterprise Census (2013), “social enterprises in the United States account for $300 million in revenue and employ an estimated 14,000 people in 28 states. Of those, 20 percent are generating impact in the area of economic advancement; 16 percent are focused on workforce development; 12 percent are targeting energy and the environment; 11 percent are in education; and 7 percent are working internationally.”
A cooperative (also co-operative or co-op) is a business venture owned and operated by a group of individuals for their mutual benefit. They can be non-profit community organizations, for-profit businesses that are owned and managed by the people who use its services (consumer cooperative), by the workers (worker cooperative), or by the people who live at a location (housing cooperative). There are also hybrids models. Proceeds are usually shared with the members as dividends, according to their participation in the enterprise, instead of how much capital they invested as done by a traditional corporation.
There are more than 1 billion people who are members of cooperatives worldwide in 98 countries worldwide; providing over 100 million jobs (20% more than multinational corporations). There are nearly 30,000 cooperatives in the U.S., with some well known companies such as Land O’ Lakes, Ocean Spray, and Ace Hardware.
Cooperatives are based on self-help, self-responsibility, democracy, equality, equity, and solidarity and the seven cooperative principles:
- Voluntary and Open Membership
- Democratic Member Control
- Member Economic Participation
- Autonomy and Independence
- Education, Training and Information
- Cooperation among Cooperatives
- Concern for Community
Crowdsourcing is the process of outsourcing tasks to an extended network of people, or the efficient pooling of human capital to achieve a desired result. It can happen both online and offline. It is different from traditional outsourcing because it involves a task that is offered to the public rather than a specific person. For example, say you need a logo designed for your business. You can post your requirements on a crowdsourcing website that may have hundreds or thousands of graphic designers and get a variety of designs instead of reaching out to only one graphic designer. It can also help tasks get done faster and at a lower cost. Wikipedia, Linux, and 99 Designs are examples of crowdsourcing in action.
Lean Startup Incubation
A lean startup is a business methodology developed by Eric Ries that enables startups to design products or services that meet the needs of their customers without requiring large amounts of funding. It has a focus on learning by experimentation, measuring progress, and gaining valuable customer feedback. It was originally developed for tech companies, but has been expanded to apply to any type of business.
The economy needs more startups to be created so more jobs will be available to help the economy grow. According to the Kaufmann Foundation, 700,000 businesses are started each year, but 3 out of 4 fail. Startup incubators, as defined by startup guru, Steve Blank, is a company, university, or other organization which provides resources to nurture young companies, usually for a share of the equity, hoping to capitalize on their success, or at least strengthen the local economy. According to the National Business Incubator Association (NBIA), there are currently over 1250 incubators today in the U.S. alone. Y-Combinator, a well known tech-focused incubator, led by Paul Graham, at the time of this writing has helped 172 companies over 7 years, which now have a combined value of $7.78 billion. The Unreasonable Institute is a startup incubator that caters to social entrepreneurs, and has served 70 ventures and raised over $23 million for their fellows.
NBIA estimates North American incubators assisted about 49,000 start-up companies in 2011. These businesses employed nearly 200,000 workers and generated almost $15 billion in revenues. Additionally, 87 percent of all startups that have graduated from programs are still in business, showing that business incubators enhance the sustainability of small business.
Cause-Driven New Media
We’ve seen what impact social media had on the Middle East rebellions, Occupy Wall Street, SOPA, Kony 2012, and many other issues. The Internet is a great medium for spreading ideas to a high amount of people in a short amount of time. Furthermore, televisions and radios are increasingly becoming Internet connected. Everyday people have the opportunity to start a movement or campaign towards positive change through the effective use of the web. A number of the barriers to gaining exposure are being removed, with more and more people taking advantage of that opportunity.
Comparing Producism to our current economic system
Do you see who society is indebted to?