Notes on the Contribution Economy

Without really giving it too much thought, I’ve been calling the economic philosophy that we’ve been working on “the Contribution Economy.” The idea is simple, perhaps even simplistic: since people get the greatest satisfaction from “making their contribution,” why shouldn’t we have an economy based on their doing so? If everyone got to make their highest contribution, and felt they were doing so effectively, wouldn’t we have a more successful economy, i.e., one that satisfied more people?

Compensating people for what they contribute seems both the fairest approach, and a way to incentive what we want most, which is to encourage people to make their highest contribution to society overall. Of course, there’s a certain minimum that everyone requires to live (which many people currently fail to receive), and this ought to be considered their reward for simply “showing up.”

This may seem idealistic, or socialist, or utopian, but in fact it was Richard Nixon who proposed the idea of a “guaranteed annual income,” which would provide a floor under every American family. We have various ways of addressing this problem today, but they are highly inconsistent, often reward inappropriate behavior, and tend to perpetuate the sense of insecurity that drives 99.9% of inhabitants on this planet. From an economist’s perspective, a GAI would also ensure a basic level of “effective demand,” and help to stabilize the economy. A guaranteed annual income would also give people the freedom to pursue their real interests, without having to compete with others, or plunder the earth’s resources, or prostitute themselves, for their basic subsistence. But beyond this they could compete, or even prostitute themselves, for greater rewards or comforts. Why we haven’t done this in society generally remains a mystery, but it seems worth considering in creating an alternative economy.

In practice, everyone who agrees to transact within the Contribution Economy would receive a certain amount of “Commons Credits” annually, or monthly, or weekly (or even daily, or second by second, since we’re using advanced computer technology). These Credits could be augmented by their willingness to make specific contributions to the public well-being; and perhaps they could, at some point, be reduced for actually causing harm to the commonwealth.

Of course, these Credits would not be useful if they couldn’t do anything with them, and this brings up the most obvious impediment to launching a new currency. It has to be able to buy things, or it has no value; but if it can be used to buy anything then it’s really no different from what we commonly use today as money. What we want is something that can exist alongside the established monetary system, that can supplement it by recognizing the creation of additional value, and that can serve to rectify some of the harm being done by the conventional economy.

Consequently we have the idea of a complementary currency, one that operates within the existing economy but helps to guide it in a fairer, more efficient, and more beneficial direction for everyone. Many such currencies have been proposed, and some even implemented on a localized or temporary basis, but apparently nothing has so far caught on at a global or even national scale. (Worth researching: are there economies that operate with multiple currencies?)

A number of factors may be combining, however, to give rise to such an additional currency. To begin with, there’s the interest in incentivizing desired behavior (such as carbon sequestration, as in G4CM), while recognizing that there is currently no conventional money available to the relevant international organizations for this purpose. Conventional money could be used, if it were available, and eventually the intention is to recognize the G4CM carbon mitigation currency as convertible to national currencies. Similarly, conventional money could be used to recognize people’s contributions, or provide a GAI; but the fact that it is not being used in this way suggests the need for a supplemental source of capital.

This is turn leads to a central feature of our idea for Commons Credits, and that’s to make every individual an investor. If we provide people with the Credits, and a way to invest them in what they believe to be important, we can empower people to choose an economic pathway out of their current predicament, which is a world of increasing inequality, of misallocated resources, and of short-sighted and selfish outcomes. In the process of placing these investments, they will actually be expanding the uses of the currency, and helping to establish its value. Those who are invested in will then need to find ways to use the currency to generate further value.

What differentiates this from conventional money, however, is that every transaction has to either provide a public benefit — a contribution to the  Commons — or provide a private benefit without causing direct or indirect public harm. Since this can be difficult to determine, all transactions are subject to review and may be undone or retroactively corrected according to the rules established by the members of the network. If a particular transaction is determined to have caused harm to the Commons, the initiator may be “fined” an amount of the Credits to correct that harm.

How I envisage this currency taking off and being used on a wide scale is “organically,” i.e., by natural adoption and adaptation by individuals, organizations, communities, or other groups of people. If it is useful, meets a need, and effectively serves its purpose, it will be accepted and spread, in a more or less viral fashion; if not, it won’t. The idea itself is not privately owned, but is put forward using a Creative Commons license, and may be used, developed, and incorporated with other ideas, providing it is also used for public benefit. In this way, we can all share the use of the idea and its benefits, a true win-win outcome.

Creative Commons License“Notes on the Contribution Economy” by Jonathan Cloud, CRCS, December 2014 is licensed under a Creative Commons Attribution 4.0 International License. Please link to

One response to “Notes on the Contribution Economy

  1. Pingback: A Global Call to Share the World’s Resources | Center for Regenerative Community Solutions

Leave a Reply

Your email address will not be published. Required fields are marked *