What is Stakeholder Capitalism?
Stakeholder capitalism is the idea that companies focus on the needs of all stakeholders, including partners, customers, suppliers, employees, communities, and the world. This idea enables companies to develop ecosystems that embrace capitalism and social responsibility to societies, communities, and the world. This approach also aims to create a system that benefits all stakeholders, not just shareholders.
Continuing the practice of Stakeholder Capitalism, the World Economic Forum has developed a vision, the Davos Manifesto 2020. The concept of "stakeholder capitalism," has been well received. The idea is also the mantra of the BRT (Business Roundtable) and has been endorsed by some 200 CEOs.
B-Corps are another trend that is shifting the business base to purpose. As major players get more serious about these issues, they promise impact, but also an extension of existing business approaches for another decade.
Initiatives like these largely live within the constructs of our existing economic systems – with their advantages and disadvantages. There is little room for consideration of the systemic health (both positive and negative factors) or complexity expressed in our economies or ecologies. This is important because we measure and manage our economies and Earth systems as we always have - even though we know they work differently. Let us therefore analyze new and disruptive market mechanisms in more detail.
Only those companies will be successful whose interests are aligned with those of all stakeholders.
Tokenization is the key innovator that enables an ecosystem where every stakeholder can participate in the economy. The token economy enables a system governed by a decentralized network of stakeholders. In this economy, value is created through token assets that essentially align an organization's economic, social, and environmental incentives. The incentives or value can be in the form of stocks, shares, points, carbon credits, loyalty points, or any other form of an index.
Tokenization is the key innovation enabler that enables an ecosystem where every stakeholder can participate in the economy. The token economy enables a system governed by a decentralized network of stakeholders. In this economy, value is created through token assets that essentially align an organization's economic, social, and environmental incentives. The incentives or value can be in the form of stocks, shares, points, carbon credits, loyalty points, or any other form of an index.
The token economy could be a means to remove unnecessary middlemen from the process. The technology enables transparent governance, where companies are more accountable for their actions and responsibilities. Tokenization acts as a tool that gives each stakeholder responsibility as well as rewards.
Value-Based Stakeholder Capitalism Models
Stakeholder mapping involves defining the participants in the economy. This includes an inventory of stakeholders who drive value creation, how they receive value in return, what incentives attract them to the economy, and how to ensure their long-term participation.
Market infrastructure involves creating a network where stakeholders can transact with each other. This includes building a global network, strengthened by decentralized technology, where users can transact tokens to add value to a business or ecosystem. In addition, the market infrastructure must also comply with regulations to avoid systematic failures.
What are Radical Markets?
Radical markets are another new concept that can be used in a fully digital ecosystem (introduced in their book "Radical Markets: Uprooting Capitalism and Democracy for a Just Society" by Eric A. Posner and E. Glen Weil).
The premise of the Radical markets Movement is to reignite the radical spirit of Adam Smith for today. We now live in an age of data. In the spirit of Adam Smith, how we can rethink the data economy to improve the prosperity of society?
Radical Markets is an umbrella term for various policies. To show where these concepts can go, we identify two of them.
The Harberger Tax is an economic policy measure that aims to equalize personal and absolute collective wealth in order to increase the public good of society. It helps ensure that property is used more productively by society, leading to an increase in overall economic productivity and the general welfare of society. The power of the market is preserved while inefficiencies in the current distribution of property are reduced. At a relative cost to the efficiency of investment returns, the prevalence of monopolies that exclude society from the wealth-creating capabilities of an asset is reduced.
ENS, considered implementing a Harberger tax concept and eventually discarded it for Ethereum domain sales. However, there are other blockchain projects that may be experimenting with some form of Harberger tax, such as described in an article by Yos Riady on "Patronage Reimagined: Harberger Crypto-Collectibles."
Quadratic voting is an alternative voting method developed by E. Glen Weil that allows for nuances (or a spectrum) in voting instead of a binary yes/no outcome. Each voter has a fixed number of votes, but the cost of casting each vote increases quadratically from the previous one, i.e., cost of voting = (number of votes)^2.
Quadratic voting, while also complex, arguably better protects the interests of small groups of voters who care deeply about certain issues and lead to better minority representation. By increasing the cost of each additional vote, it discourages voters who are not interested in an issue from casting multiple votes for that issue. It also allows voters to show the intensity of their support for a particular issue by casting multiple votes for that issue-at the expense of their ability to vote on other issues.
In modern democracies, the principle of "one person, one vote" commonly applies in elections and legislative processes. Corporations have often adopted more complex voting mechanisms (e.g., allowing a shareholder to nominate another person to vote on its behalf). Complex, but arguably more democratic, voting systems such as proxy voting and list voting have not endured because of their complexity. Now that decentralized collective decision making enables transparent and public tracking of voting results, more intricate voting systems can be instituted. By empowering voters to express not only their choices, but also the intensity of those choices, the protect the interests of any small groups of voters who care deeply about particular issues.
- Property Is Only Another Name for Monopoly (Scientific article), Eric A. Posner, E. Glen Weyl
- Radical Markets and the Question of Rational Design (Article), Matthew Prewitt
- RadicalXChange (Official website)
- The Fall of the Labor Share and the Rise of Superstar Firms (PDF), David Autor, David Dorn, Lawrence F. Katz, Christina Patterson, John Van Reenen
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