Chapter 1: The Dual Economies

In her influential 2012 publication "Owning Our Future," Marjorie Kelly articulates the existence of two parallel economies. The first is the tangible economy that generates essential goods and services, while the second is the financialized economy, which dissects the real economy into tradable financial instruments. This latter economy does not produce any real goods; instead, it is engineered to siphon wealth from the foundational economy. While extraction is often associated with natural resource industries such as mining and timber, financial extraction is equally destructive. It adds no genuine value but is specifically designed to drain resources from the system.

Kelly proposes an alternative framework called generative ownership, which aims to reconnect the real and financial economies. She advocates for models like employee, producer, or consumer ownership, which integrate the roles of investors and various stakeholders. To illustrate her point, she cites numerous successful enterprises that have adopted these structures. However, there are significant challenges with her approach.

First, the implementation of generative ownership is entirely voluntary. Those who embrace these values can choose to act on them. Kelly presents inspiring scenarios for potential change, yet traditional business leaders, such as those at Exxon, face no obligation to adopt these ideals. Without a strong internal motivation, any shift towards generative practices may provoke backlash from entrenched interests, particularly shareholders, leading to leadership changes without real progress.

Second, while companies embracing these generative principles may thrive in times of growth, they often struggle in less favorable conditions. Kelly suggests ongoing growth is unnecessary, but the reality is stark: managing a business in decline or one facing stiff competition is a daunting challenge. The principles of generative ownership may falter when businesses must downsize to survive. When faced with financial crises, leaders may find their noble ideals quickly cast aside, leaving employees disillusioned rather than empowered.

The notion of generative ownership often appears naive, rooted in the long-standing belief that better leadership can resolve systemic issues. This perspective has persisted since the critiques of industrial capitalism emerged in the 18th century, positing that the problem lies with individuals rather than the system itself. If this premise were valid, we would have witnessed meaningful change by now.

A transformative system, however, is emerging, which Kelly does not address in her work. This new paradigm arises from the digital production revolution, emphasizing collaborative production and non-ownership. In this model, creations belong to the commons, emerging from a collective desire to contribute. Key examples include open-source software and platforms like Wikipedia.

In a non-ownership framework, products are free, eliminating the possibility of financial extraction. There is no ownership to sever; instead, the digital economy generates goods that are freely accessible to all. Scarcity diminishes, and abundance prevails, fundamentally challenging Wall Street's financialization model.

While generative ownership relies on visionary leadership, non-ownership fosters grassroots collaboration, making it indispensable. Unlike generative ownership, which redistributes ownership rights, non-ownership abolishes them entirely. Rights are assigned through a collaborative commons, safeguarding against misuse without conferring ownership to any individual or entity.

The appeal of non-ownership lies in its inevitable spread alongside digitalization. Its principles will permeate various industries, prompting the question: "How do you compete with free?"

Concerns often arise regarding products that cannot be digitalized, such as footwear. Consider the evolution of this industry:

1. Take Adidas, which has pioneered a fully automated factory in Germany, drastically reducing the need for traditional shoemakers. This facility employs a mere 160 individuals while bringing production closer to consumers, facilitating rapid manufacturing of both standard and custom-fit shoes.
2. Next, envision a future where consumers own 3D printers capable of producing shoes at home. Users will select designs, input their shoe sizes, and print footwear on demand, effectively decentralizing production.
3. In this scenario, the value shifts from the physical product to the digital design, which can be endlessly replicated and modified by anyone. Groups of enthusiasts can collaborate to innovate better designs, fostering a communal rather than proprietary approach.

While these stages may be decades apart, the transition will not be gradual due to technological constraints but rather because of the need to dismantle existing capital investments tied to traditional capitalist interests. The substantial capital tied up in Adidas' automated factory will require time to recover, but as consumer 3D printing technologies advance, new platforms for design sharing will emerge, signifying a shift towards a post-capitalist economy.

Wall Street and its investor class will resist these changes. Kelly argues for reallocating Wall Street's extractive mechanisms to more deserving stakeholders, yet digitalization, as I have outlined, could eliminate the very assets Wall Street seeks to exploit. Collaborative production yields goods that are free, require no capital investment, and generate no profit. Without anything to extract, Wall Street's model becomes obsolete.

So, what can you do? Engage actively in collaborative production initiatives. Your contributions can help reshape the world for the better.

You can find my newsletter, Intertwine: Living Better in a Worsening World, here.

Anthony Signorelli

Offering ideas, insights, and creativity to enhance life amid challenging times. Topics include masculinity, postcapitalism, climate change, digitalization, and more.

Chapter 2: The Digital Revolution and Collaborative Production

The first video titled "The Dark Side of Wall Street: Watch OUT" explores the hidden dangers of financialization and its impact on the economy. It delves into the perils of prioritizing profit over genuine production.

The second video, "Why You Smell Like Dat - Black Wall Street," discusses the historical significance of Black Wall Street and its implications for understanding modern economic structures.