What Is The Generative Economy?

    Marjorie Kelly Posted by Marjorie Kelly.

    Marjorie Kelly is the co-founder and editor of Business Ethics, a national publication on corporate responsibility launched in 1987 and read by high-level opinion leaders nationwide.

    Say hello to Marjorie here.



    What Is The Generative Economy?

    What is the generative economy?

    As financial and ecological crises multiply and linger in our time, many people remain grim adherents of the TINA school of thought: There Is No Alternative to capitalism as we know it. Yet emerging alternative designs show that there is a real and workable alternative, which goes beyond the dusty 19th century categories of capitalism vs. socialism. It’s ‚“yet to be recognized as a single phenomenon because it has yet to have a single name‚” Kelly writes. ‚“We might try calling this a family of generative ownership designs. Together they form the foundation for a generative economy," an economy whose fundamental architecture tends to create beneficial rather than harmful outcomes. A living economy that has a built-in tendency to be socially fair and ecologically sustainable.

    Kelly writes:  “This is a book about deep change. It’s about hope. It’s about the real possibility that a fundamentally new kind of economy can be built, that this work is further along than we suppose, and that it does deeper than we would dare to dream. It’s about economic change that is fundamental and enduring: not green wash or all the other false hopes flung in our faces for too long. The experiments I’m talking about are not silver bullets that will solve all our problems. They have flaws and limitations. But they nonetheless represent change that is fundament and enduring because it involves ownership. That is to say, what’s at work is not the legislative or presidential whims of a particular hour, but a permanent shift in the underlying architecture of economic power.”

    THE DESIGN OF ECONOMIC POWER- The Architecture of Ownership

    EXTRACTIVE OWNERSHIP

    GENERATIVE OWNERSHIP

    1.Financial Purpose: maximizing profits in the short term

    1. Living Purpose: creating the conditions for life over the long term

    2.Absentee Membership: ownership disconnected from the life of the 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

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