Discover more from Transportist
Transportist: Thought Experiment: A Shared Economy of Success (What if we 'Owned' Each Other)
It takes a village and a stock market
You didn’t build that - Barack Obama
No one is entirely self-made. The entire discussion of Nepo Babies (and in counterpoint, Failsons) makes clear a surprising large number of people have familial advantages, whether they put them to good use or not. But even for those of us with normal or disadvantaged backgrounds a variety of individuals contribute to our personal success, extending beyond our immediate families. These might include an inspiring teacher, a supportive boss, or a mentor who invested resources and political capital for your advancement. Each person played a significant role in your path, helping you more than they needed to or would benefit them personally, producing positive externalities. More people would aid each other if we could quantify their contributions, more formally rewarding them, and thus incentivising them and internalising those positive externalities.
The Shared Economy of Success (SES) is a concept that encapsulates this efficiency. Achievements are not solely individualistic, but the result of a network of contributors — your personal 'village.' 12 Everyone who assists in your progress should have an economic 'share' (i.e. an actual financial stake) in your future, similar to holding stock in a company.3 Contributions would be recognised and rewarded, enhancing the overall process of personal development and success.
How Does It Work?
Under the SES model, each participant would hold a portfolio of fractional economic outcomes from the people they've influenced. For instance, a teacher who has influenced hundreds of students over their career would hold a small share in each of these students' economic outcomes.4 5At the same time, each person would keep the largest share of the economic outcomes they themselves produce, and the government would take what the government takes to pay for things only government can do.
Here's a hypothetical example to illustrate how this system might work:
Let's say Jane is a successful entrepreneur earning $200,000 annually. According to the guidelines of this system, she only starts sharing her income when it exceeds a certain threshold. Let's set this threshold at $100,000 for the sake of simplicity. This means that $100,000 of Jane's income would be eligible for sharing.
Suppose the portion of her income above the threshold that Jane agrees to share is set at 10%. This means Jane would share $10,000 ($100,000 x 10%) of her income annually.
Now, let's consider who Jane and her guardians have identified along the way as the key influences in her success:
Her neighbour, who babysat her and who instilled in her a strong work ethic and provided her with a stable upbringing.
Her university professor, who taught her transport analysis, wrote reference letters, and helped her get journal articles published.
Her first boss, who provided her with important industry contacts and valuable work experience.
Her business partner, who works with her in running her business.
For simplicity, let's assume she attributes equal influence to each party. Each would then receive a 25% share of the $10,000 to be distributed, equating to $2,500 per year.
This is a greatly simplified example and actual implementation would be much more complex. Real-life factors such as the total number of influencers, the degree of influence, variable income levels, taxation considerations, and many others would need to be taken into account. Furthermore, this proposal would require a comprehensive system to manage the identification of influencers, the calculation of income shares, and the distribution of payments.
Why Should We Do This?
This approach serves to align everyone towards mutual success and cooperation. By tying a part of our economic outcome to those we influence, we encourage positive, constructive interactions and discourage harmful, destructive ones. In essence, we're fostering a community that is supportive, nurturing, and driven towards mutual success, where follow-up is motivated instead of discouraged.
How Could This Be Implemented?
Implementation could involve complex systems of contracts, data tracking, and possibly new technologies such as blockchain.6 It would require a robust and reliable method of attributing influence and determining the resultant economic share, while also ensuring fairness and preventing manipulation. Imagine each year (or month), each individual (or their guardians if they are underage) would issue new shares to distribute to those who influenced them, undistributed shares would go to the government. The incentive for this is that participating in this system would provide tax benefits (you don’t pay taxes on transferred income, and perhaps other tax credits), and future generations would pay to you so that you may be on the receiving end.
There are undoubtedly challenges to consider, and much discussion to be had. How do we quantify influence accurately and fairly?7 How do we avoid collusion? What are the implications for personal freedom and autonomy?
Despite these hurdles, the concept is worth exploring. The shared economy of success leads us to re-evaluate our perceptions of individual achievement and communal influence. It calls on us to acknowledge and reward the interconnected nature of success in a tangible way. As we move into an increasingly interconnected world, perhaps it's time to reconsider how we define and distribute economic success.8
This is the idea behind the proverb “It takes a village to raise a child”, made famous in the US by Hillary Clinton’s (1996) book “It Takes a Village”, which set off US conservative media into apoplectic fits. But the countervailing notion, that no one but yourself or your family contributes to your outcome flies in the face of everything we have learned about humans who are generally not hermits, nor isolated within small nuclear families, and do instead participate in communities.
For example a twin study shows heritability of incomes is about 40-50%, but shared environment (the household) isn’t actually that important, leaving the other 40-50% for random individual differences and the greater environment (the culture, other people, etc.). “Using twenty years of earnings data on Finnish twins, we find that about 40% of the variance of women’s and little more than half of men’s lifetime labour earnings are linked to genetic factors. The contribution of the shared environment is negligible.”
To be clear, these are non-voting shares, you get the dividend, but don’t get a vote in operations or management. Obviously anyone can give advice to or take advice from anyone else, so you can make suggestions to people in whom you have shares, but ultimately, you don’t get to vote to remove the Board of Directors.
This would be on top of a base salary, since a young teacher of young students may not get any return on their investment for decades. Teachers should not be working for tips. One could go full market here, and have some private institutions lend teachers money in their early years, paid back in the later years from the earnings of the system. That seems impractical, though might constitute a useful thought experiment about aligning anarcho-capitalism with the time value of money, long term human capital investment, and risk.
Bloom Institute of Technology (Lambda School) is a coding school that initially used income share agreements as payment. In Australia, domestic students often pay for university with HECS-HELP system, which loans students money for university, and which is paid back through taxes once income exceeds a threshold. This still is only repaying the cost, rather than the government getting “shares”, although arguably, it does that because it uses income taxes (and progressive taxes at that).
I think I found a productive use for the blockchain, particularly if we don’t want this administered by a government agency.
Incorporating blockchain technology into the proposed shared economy of success system could potentially offer several advantages, thanks to its unique attributes:
1. Transparency: Blockchain's public ledger system can provide a transparent record of all transactions and allocations of shares. This could help ensure fairness and accountability, making it easier to track who is contributing to whom and how much they are receiving in return.
2. Security: Blockchain is inherently secure due to its decentralised and immutable nature. It's incredibly difficult to alter or forge transactions once they've been recorded on the blockchain, which could help prevent fraud and collusion in the system.
3. Efficiency: The use of smart contracts on a blockchain can automate the allocation and distribution of shares, making the system more efficient. Smart contracts can be programmed to automatically allocate shares based on predetermined criteria or agreements, reducing the need for manual oversight.
4. Trust: Blockchain's decentralised nature eliminates the need for a trusted intermediary. This could be particularly beneficial in a system like the shared economy of success, where trust is crucial.
5. Global Accessibility: Blockchain technology is accessible anywhere with internet access, which can enable the participation of people around the world, helping to create a truly global shared economy of success.
For instance, to get a bit ‘meta’, how do we attribute the intellectual forebears of the idea proposed herein. Here's a rough estimate:
Communitarianism (25%): The idea that individual success is deeply intertwined with the community and that the community should benefit from the success of its members is a core tenet of communitarian philosophy. This proposal echoes the communitarian emphasis on social responsibility and interdependence.
Libertarianism (15%): The market-based approach to sharing economic success, where individuals hold 'shares' in others' economic outcomes, can be traced back to libertarian principles of voluntary exchange, individual liberty, and free markets.
Cooperative Economics (20%): The proposal resonates with the principles of cooperative economics, where members contribute to and benefit from shared resources. The mutual sharing of economic outcomes is akin to the profit-sharing model of cooperatives.
Henry George’s Economics (20%): The idea that those who benefit from a common resource (like land or, in this case, human potential) should share the economic benefits is a reflection of Henry George's philosophy. This proposal can be seen as an adaptation of his land value tax concept applied to human capital.
Network Theory (10%): The proposal also draws from network theory, recognising that individuals are nodes within wider networks, and that the value generated within these networks should be distributed among its members.
Behavioral Economics (10%): The system relies on behavioral economics, particularly the idea that economic incentives can motivate positive behaviors — in this case, investing in others' success.
These percentages are speculative, and it's impossible to precisely quantify the influence of each idea. Undoubtedly, the proposal draws on other intellectual sources not listed here. I believe it represents a novel synthesis of ideas from various fields, each contributing its own unique perspective to the concept.
A collaboration with ChatGPT4, as per usual.