Jump to content
In the Name of God بسم الله

Social Credit - the alternate business model to capitalism


Recommended Posts

Salam, Ya Ali (عليه السلام) Madad, Lanat upon the enemies of the Ahlulbayt (عليه السلام)

Aliun Wali Allah Wajib

story time kids. gather round. 

I did my masters way back in 2004 to 2006. one of my class fellows, for the sake of this thread lets call him rob (because that's his name) was really into philosophy and social models and stuff like that. he asked me a question back then, which has been baking my noodle still over 10 years later. and now I ask it to you, in the hope that one of you can answer. 

currently, the basis of capitalist society is the exchange of money for goods and services. communism has a different model but is irrelevant in this day and age. 

most of the problems with this world are because of this business model, such as war for oil, pollution, corruption, suffering, poverty and so on. all of them can be traced back to the seeking of financial profit over effort put in.

if we want to change society, as in really change it, we need to change the model.

charities/ social projects are based on this model too, so we give charity X some money, and they go and do Y with the money we send them.

people doing acts of kindness is the same too - we do good and accept the financial loss or the loss of time and effort in return for the good deeds we do. 

so, the question is:

how do we build a business model (that is financially beneficial for everyone involved) that rewards people for doing good deeds? 

i have not been able to answer because i cannot break my mind free of the framework to think differently. do any of you have any ideas?

Link to comment
Share on other sites

Just now, AfricanShia said:

I dont think there is such a compatible and functionable system of sorts. In my guess I would say an established social credit system. Money given to the people by the government for people giving to the community. It is a mini cycle of economy boost. 

sounds a lot like communism. communism is widely viewed as the perfect model in theory, but an absolute disaster in 100% of cases where it was applied. because it doesn't factor in peoples greed and desire to be corrupt. 

 

Link to comment
Share on other sites

  • Moderators
1 hour ago, DigitalUmmah said:

 because it doesn't factor in peoples greed and desire to be corrupt. 

I'm not sure greed and desire to be corrupt are innate. I think they are either habitual, or a result of some kind of scarcity or feeling of inferiority. 

I propose a two layered financial model: provide for the basic needs of every person, and beyond that, let them earn what they want and are capable. When nobody is homeless, hungry, or without education or medical care, there is no longer any need for mandated minimum wage. Small business can flourish by hiring workers who are happy to be there, even if for a much lower salary than for a soulless corporation. With everyone fed, there will be no need for the expensive government subsidies on certain foods items. As for housing, I propose a voucher or credit, which can be applied to whichever location, size, and style the person prefers. Education and medical care, of course, should be free and easily accessible, just like highways, bridges, and emergency services. 

Link to comment
Share on other sites

1 hour ago, DigitalUmmah said:

sounds a lot like communism. communism is widely viewed as the perfect model in theory, but an absolute disaster in 100% of cases where it was applied. because it doesn't factor in peoples greed and desire to be corrupt. 

 

Its not communism. Communism is everybody treated economically equal. Im proposing is Social Credit, the government loaning money to the people who give to the community. It is a way to boost the economy and a stabilized money flow system. 

Link to comment
Share on other sites

5 minutes ago, notme said:

I propose a two layered financial model: provide for the basic needs of every person, and beyond that, let them earn what they want and are capable. When nobody is homeless, hungry, or without education or medical care, there is no longer any need for mandated minimum wage. Small business can flourish by hiring workers who are happy to be there, even if for a much lower salary than for a soulless corporation. With everyone fed, there will be no need for the expensive government subsidies on certain foods items. As for housing, I propose a voucher or credit, which can be applied to whichever location, size, and style the person prefers. Education and medical care, of course, should be free and easily accessible, just like highways, bridges, and emergency services. 

what are your views on the venus project? it sounds like what you are proposing to me but i'm suspicious as hell of it. sounds like tech based communism to me. 

Link to comment
Share on other sites

4 minutes ago, AfricanShia said:

Its not communism. Communism is everybody treated economically equal. Im proposing is Social Credit, the government loaning money to the people who give to the community. It is a way to boost the economy and a stabilized money flow system. 

where would the money come from, for the government to distribute to the people? 

Link to comment
Share on other sites

  • Advanced Member

I don't know about the other countries, but what you guys are describing is in line with tax credits. In Canada, if you donate to charities, you are eligible to receive a tax credit. Not only does this credit entice / encourage the wealthy to donate, it also benefits them. It's a win / win situation for the poor and the wealthy within the framework set by the government. If only two parties where involved in a transactions (buyer / seller), then it would be impossible to create a system where both parties benefit from good acts since essentially one person is losing money while one is receiving. In our case, because a third party is present (buyer / seller / government) this third party can set up subsidies to encourage good acts.

Link to comment
Share on other sites

@Meesum_Mtl yeah we have something sort of similar in the UK too. credits are fine, but the idea which will be revolutionary will be peoples entire WAGES being based on what good they can do. not rebates etc. 

3 minutes ago, Meesum_Mtl said:

f only two parties where involved in a transactions (buyer / seller), then it would be impossible to create a system where both parties benefit from good acts since essentially one person is losing money while one is receiving.

yep - this is the multi billion dollar question. whoever can figure this out will change the world. my idea was to have a social media based platform where people earned points for certain good deeds, and these points when accumulated could be exchanged for something of value, but it wasn't a good idea because it went against the Islamic concept of charity in secret, and was wide open to abuse/ fraud. 

Link to comment
Share on other sites

  • Advanced Member
18 minutes ago, DigitalUmmah said:

@Meesum_Mtl yeah we have something sort of similar in the UK too. credits are fine, but the idea which will be revolutionary will be peoples entire WAGES being based on what good they can do. not rebates etc. 

yep - this is the multi billion dollar question. whoever can figure this out will change the world. my idea was to have a social media based platform where people earned points for certain good deeds, and these points when accumulated could be exchanged for something of value, but it wasn't a good idea because it went against the Islamic concept of charity in secret, and was wide open to abuse/ fraud. 

Honestly, I think such a system defeats the purpose of charity. You are supposed to donate from the goodness of your heart, having such a system turns charity into a complete business transaction that would only be used if it made sense money wise i.e. if I donate X amount of dollars, how much is it saving me annually. The sole benefit I see in this is that the wealthy would have a reason to give money if they aren't willing to do so through "goodness". This is called Tax credits in our society or Khums and Zakat in Islamic societies. The added benefit in adding religion to the equation is that "sawab" can help push donations without having to recompense the wealthy through something tangible.

In the first part of your text, you mention wages being based on the good they can do. Isn't this the same as a regular job? Depending on how efficiently you can do good within a set time frame = Donation of time = Salary. It's the same as working / investing efficiently within a set time frame =  Salary = donations.

Edited by Meesum_Mtl
Link to comment
Share on other sites

10 minutes ago, Meesum_Mtl said:

In the first part of your text, you mention wages being based on the good they can do. Isn't this the same as a regular job?

yep. at the moment you get a salary based on the profit you bring to the business. if there was some way to break this model and your salary be based upon the value you bring to other peoples lives, it would be amazing. 

in the current mindset we are conditioned to, this is impossible. some of the greatest thinkers have still not answered it. its a good thought experiment though. whoever cracks it can take their rightful place amongst the greatest minds in our history. 

Link to comment
Share on other sites

  • Moderators
4 minutes ago, DigitalUmmah said:

yep. at the moment you get a salary based on the profit you bring to the business. if there was some way to break this model and your salary be based upon the value you bring to other peoples lives, it would be amazing. 

How do you quantify value brought to people's lives?

Also, isn't improving the lives of others it's own reward? Surely money isn't the only motivator. 

Link to comment
Share on other sites

  • Moderators
57 minutes ago, DigitalUmmah said:

what are your views on the venus project? it sounds like what you are proposing to me but i'm suspicious as hell of it. sounds like tech based communism to me. 

This is the first I've heard of it, but I'm suspicious of any system which places power in the hands of a few individuals. This we know without doubt: power corrupts. 

Link to comment
Share on other sites

2 minutes ago, notme said:

How do you quantify value brought to people's lives?

robs idea was community. I disagreed with him.

his definition of "value" was the example of a cafe/ coffee shop based on "pay it forward". i.e. you didn't buy a coffee for yourself, you paid for someone else, and you "took" the order someone else who paid before you. the site would also be a "drop & take" place so people could donate things like books, board games, art supplies etc or take them as needed. plus the entire place would be a canvas so people were free to write on walls, tables etc. 

i disagreed with him because it might work in some better off areas or university campus. but it just wouldn't work in most communities because people would just take anything of value and sell it on eBay. 

 

Link to comment
Share on other sites

بسم الله الرحمن الرحیم

السلام علیکم

@DigitalUmmah

@Shaykh Patience101

As you can guess, this question and many related ones will be among those I'm going to write about at great length in my blog, and a lot of what I am currently posting is to prepare the way.

First, by looking at some of the answers, I can see there is some confusion between a business and an economic system. Two entirely different things. Also a confusion between a government and a business management. Again, these are different. To make it vivid, I'll give examples. The first pair differ in the way the Republican Party (business) differs from the US Constitution (economic system). They are geared towards different things and confer different sorts of discretionary powers. The Constitution wants to ensure good governance while the Party wants more members, better campaigns, and wants to win the vote. The second pair differ too, though the difference here is less huge. The analogous case is that between the Speaker of the House (government) and the Prime Minister (business management). The Speaker has wide discretionary powers in the legislative chamber and tries to manage the legislative process. He tries to incentivise good parliamentarianship. But he cannot expel those whose views he doesn't like. The Prime Minister on the other hand manages the cabinet and has no discretion in the chamber but he has the absolute power to expel from the cabinet those whose opinions he doesn't like - so he has absolute power over who sits on the Frontbench. In short, the Speaker (government) manages something different according to different rules and aiming for different objectives to the Prime Minister (business management).

Second, your question asks about a business that achieves two things. First, it is financially benefitting everyone involved. Second, it rewards good work. Assuming this is a successful business already, your question is asking about Distribution of the income through wage/salary payment schemes and Monetary and non-monetary Incentivisation programmes as well as Business Structures (like forms of ownership, forms of decision-making, forms of organisation, etc.) that ensure more diffusive distribution and greater incentives to good work without costing the business in the long-run.

Third, I plan to approach these questions gradually over the coming months and years, Godwilling, as this is an area Shi'a Muslims need to develop quickly and intelligently and with one eye to modern reality (which is fast changing) and another to the Islamic tradition (which unfortunately is currently stagnating). So I won't be giving my opinions until I have laid the many premises.

Also, monetary charity is not a necessary part of an Islamic society and a Hadith suggests that when the Imam establishes his government, people will not find anybody to donate to, such is the level of prosperity.

و علیکم السلام

Link to comment
Share on other sites

  • Moderators
11 minutes ago, DigitalUmmah said:

because people would just take anything of value and sell it on eBay. 

Haha, darn capitalists! Eliminating need would reduce this, but making it socially unacceptable would work better.

Link to comment
Share on other sites

بسم الله الرحمن الرحیم

السلام علیکم

@Meesum_Mtl

@DigitalUmmah

@Shaykh Patience101

The idea that in an exchange between buyer and seller, one wins and the other loses because one receives money and the other gives it away is an error.

The buyer gives the money away for something they lack and want. For example, you cannot eat money, but you can eat bread. If you are hungry and you find a baker who offers bread, both of you would be winning, for you will have satisfied your hunger and he will have the money to go and satisfy his thirst - and if you happen to be selling cold drinks, then now it's you who receives and he who gives away and again both win.

Even more wonderful is when you hand over money and buy technology that you can then utilise to produce products at less cost and sell them for a profit. Now, the money you initially gave away was idle and sterile. By giving it away in exchange for technology, that money has become fertile in your favour and generated more than you initially possessed.

The same logic that holds for productive technology holds for rewarding productive human work, since the human body can be regarded as a very complex multitasking organic piece of equipment that God has constructed. Any investment in human labour is not losing money but making sterile money fertile.

In about a fortnight, I shall be discussing this and similar points about exchange inshallah.

و علیکم السلام

Link to comment
Share on other sites

  • Advanced Member
Quote

بسم الله الرحمن الرحیم

السلام علیکم

@Meesum_Mtl

@DigitalUmmah

@Shaykh Patience101

The idea that in an exchange between buyer and seller, one wins and the other loses because one receives money and the other gives it away is an error.

The buyer gives the money away for something they lack and want. For example, you cannot easy money, but you can eat bread. If you are hungry and you find a baker who offers bread, both of you would be winning, for you will have satisfied your hunger and he will have the money to go and satisfy his thirst - and if you happen to be selling cold drinks, then now it's you who receives and he who gives away and again both win.

Even more wonderful is when you hand over money and buy technology that you can then utilise to produce products at less cost and sell them for a profit. Now, the money you initially gave away was idle and sterile. By giving it away in exchange for technology, that money has become fertile in your favour and generated more than you initially possessed. In about a fortnight, I shall be discussing this and similar points about exchange inshallah.

و علیکم السلام

I don't see how it is an error to view the transaction in such a manner. There are tangible gains/losses (as discussed tax credits) and intangible gains/losses (as discussed sawab or goodwill) on the side of the buyer and on the side of the seller. If the person donating does not gain tangibly or intangibly then as a rational person he would not give. In our discussion we are referring to a lose/win situation because unless the person donating receives a tangible reward AND if he does not get a feeling of doing good (marginal utility) then he will be in a lose situation.

What I am trying to get at here is that a lot of people lack moral compass and do things for their sole benefit. To get a society to donate completely, you must instill a reward whether it be tangible or intangible for doing such acts. But the fact that you need a reward to instill a good act defeats the purpose of the act itself because it cannot be considered charity when you are giving and expecting to receive.

I fail to grasp what your third paragraph is getting at. This is just investing by definition. I might decide to invest in technology to gain returns / use economies of scale or economies of scope / invest in equities but what does this have to do with donations? 

Link to comment
Share on other sites

  • Moderators

Generosity is giving without expectation of return. My observation is that very poor and very wealthy people are the most generous, wealthy because it makes them feel good with little sacrifice, poor because they can more easily see themselves in a similar need.

So how can we instill generosity in the middle class? They lack perspective of the poor, and what they give is at a noticeable cost to them. Can these obstacles be overcome? 

Link to comment
Share on other sites

بسم الله الرحمن الرحیم

السلام علیکم

@Meesum_Mtl

Thank you for responding.

You initially spoke of a win/lose situation in a buyer/seller exchange. I said this is not a win/lose situation by default.

Now you speak of a charity which is not an exchange, and involves neither buyer nor seller. This is not what I responded to. But I will respond to it now.

*

First, the OP question is about a business rewarding good work; this makes it a type of exchange. It is not about giving charity to needy people, which isn't an exchange.

Obviously, a business benefits from good work and so there is a gain in handing over the reward (monetary or otherwise.) This makes it a win/win situation.

 

Second, charity can be given both manifestly and in secret, and both are divinely rewarded. So if a business spreads the news of how it spends a percentage of its profits on educating an impoverished village in some forgotten corner of the globe, then this does not nullify the charitable deed. If it encourages customers to buy from them, it profits them greatly but also increases their charity to those poorer villages. Again, a win/win situation.

 

Third, even secret charity is given in the hope of gaining a profit, namely God's pleasure, so the religious logic of charity is not meant to be win/lose, but a win/win.

*

However, if people have the mindset that charity is a win/lose situation, or if manifest and self-promoting charitable deeds are socially frowned upon, then indeed the incentive to be charitable decreases.

و علیکم السلام

Link to comment
Share on other sites

  • Moderators
Quote

However, if people have the mindset that charity is a win/lose situation, or if manifest and self-promoting charitable deeds are socially frowned upon, then indeed the incentive to be charitable decreases.

That's the middle class mentality I was talking about! 

Link to comment
Share on other sites

  • Advanced Member
Quote

بسم الله الرحمن الرحیم

السلام علیکم

@Meesum_Mtl

Thank you for responding.

You initially spoke of a win/lose situation in a buyer/seller exchange. I said this is not a win/lose situation by default.

Now you speak of a charity which is not an exchange, and involves neither buyer not seller. This is not what I responded to. But I will respond to it now.

*

First, the OP question is about a business rewarding good work; This makes it a type of exchange. It is not about giving charity to needy people, which isn't an exchange.

Obviously, a business benefits from good work and so there is a gain in handing over the reward (monetary or otherwise.) This makes it a win/win situation.

 

Second, charity can be given both manifestly and in secret, and both are divinely rewarded. So if a business spreads the news of how it spends a percentage of its profits on educating an impoverished village in some forgotten corner of the globe, then this does not nullify the charitable deed. If it encourages customers to buy from them, it profits them greatly but also increases their charity to those poorer villages. Again, a win/win situation.

 

Third, even secret charity is given in the hope of gaining a profit, namely God's pleasure, so the religious logic of charity is not meant to be win/lose, but a win/win.

*

However, if people have the mindset that charity is a win/lose situation, or if manifest and self-promoting charitable deeds are socially frowned upon, then indeed the incentive to be charitable decreases.

و علیکم السلام

Understood, but that is not coming up with a new business model in the way the OP is asking (he may clarify his stance, maybe I'm understanding his needs wrongly @DigitalUmmah). An example he gave was peoples salaries being based on the good they do which would break out of the business models currently available (unless that already exists). The business model you are currently defining is a form of Social Entrepreneurship. This is exactly like people who advertise that their products are "fair trade".

Let me clear up what I meant by buyer / seller. The reason that these terms where used was to demonstrate the fact that someone is receiving something while someone is giving something up. I did not mean it in a literal sense if that clarifies my previous post.

After your explanation, the problem rests with the definition of charity. As @notme defines it "Generosity is giving without expectation of return", and I hold the same views as he/her. After reading your second point the flaws still exist in my opinion. First of, you are advertising your generosity to try and run a marketing campaign that may help fund further acts of generosity by increasing your sales.

1. Although notme's definition of generosity may not be held by everyone, if we where to include this definition then the business advertising their generosity is not doing so for good rather it is doing so to create a revenue stream even if it will use a portion of that increase in revenue to continue to generously give. This method is well describe in Social Marketing. Since notme's definition of generosity may not be universal, refutation of this point will be left at your discretion because I cannot back up this point with evidence since it is a personal view.

2. The individual who is using social marketing will analyse the return on his investment. After the initial expense of good will, and advertisement of the fact that he has incurred such good will expense, will he be able to maintain or increase his expense if this does not lead to an increase in sales? For the sake of argument, let's say his expenditure does not lead to an increase in sale through advertisement of his good deed, will he still be willing to make the investment the following year? Surely any business person will look at his ROI.

3. If a business starts advertising it's generosity, it may have an initial positive impact. If a second business adopts this method it may as well benefit through a positive impact. But once it becomes a norm to adopt this practice, the impact will not be great enough to benefit from an increase in demand for your product since the increase will be minimal or non existent. This will lead to a win / lose situation. 

The second point I wanted to touch upon is the divine aspect. I agree with you that charity is not meant to be win/lose but win/win through the hope of gaining God's pleasure. But as you have mentioned the incentive decrease when the mindset is not the case. Furthermore, if we look at larger corporations then we cannot take this mindset into account since the decisions are governed by multiple people. It might make sense to the CEO and not to the CFO but the decision lies with the BOD. Due to this, it is hard to believe that the majority will agree to a win/win situation due to the incentive of God's pleasure. For this argument to work, your shareholder's have to be religious, your BOD has to be religious and upper management must also be religious.

The model you propose is a good model for early adopters but it is not a model that is sustainable in the long run, it cannot be applied universally (it might work in religious societies) nor is it revolutionary (model is well described in social entrepreneurship and social marketing). If we where to forget every single point except for the marketing impact + the fact that large corporations cannot make decisions based on one individuals religious belief, I don't see how this will work.

Link to comment
Share on other sites

بسم الله الرحمن الرحیم

السلام علیکم

@Meesum_Mtl

Thank you.

You're mixing my response to the OP on business models with my response to you on trade and charity. The two are not related.

Your point on charity was not related to the OP either, because the OP question is about a business model which by its nature must involve exchange, whereas charity does not involve any exchange and so isn't business in the first place.

You may note that I did not give my opinion on the OP's question. I have not proposed any business models.

*

But my response to you went through two stages. First, I discussed what you said about buyer/seller transactions being a win/lose situation, arguing that it isn't because it can be managed so as to generate more wealth. Second, I discussed what you said about charitable donations as being a win/lose situation, arguing that it isn't because it can be incentivised in various ways.

*

As for definitions of generosity, that is neither here nor there, because we are talking about incentivising the action of giving donations, regardless of the intention behind it. This is about making business favour ethics, not about making businessmen ethical people. The two issues are distinct and shouldn't be confused. Confusing them only blocks possible solutions, because any solution to the former issue would fail on the latter, and so would be unnecessarily discarded should we fail to distinguish between the two.

 

و علیکم السلام

Link to comment
Share on other sites

  • Development Team
7 hours ago, DigitalUmmah said:

where would the money come from, for the government to distribute to the people? 

From taxing the rich and big corporations, any kind of big/global business. Basically millionaires and billionaires' wealth should be redistributed by yearly taxes, which gives money to the government to loan money to give people who genuinely and sufficiently give to the community. Small businesses should be untouched by the tax and allowed to thrive in a libertarian model but prices set at a minimum amount; You cannot sell below the minimum amount. E.g. Toliet paper starts at £6, you can sell at any price except below £6.

Otherwise government should be forbidden to interfere with small businesses and should only set the minimum prices.

Also there should be poverty control laws, nobody should be allowed in live under £800 and again this will come from taxing big business, millionaires and billionaires.

 

Edited by Gaius I. Caesar
Link to comment
Share on other sites

  • Moderators
1 hour ago, Learner2526 said:

Capitalism is the only way. That's all I'm going to say.

Capitalism always leads back to feudalism. Look, here we are again! 

But I guess if we have revolutions often enough we can mix up the money from time to time. Maybe that makes it ok. 

Link to comment
Share on other sites

  • Veteran Member
1 hour ago, notme said:

Capitalism always leads back to feudalism. Not with the 2nd Amendment around. Same with indentured servitude. 

But I guess if we have revolutions often enough we can mix up the money from time to time. Maybe that makes it ok. 

Revolutions are not needed when there is competent public administration and an absence of excessive social engineering.

Of course, gov't by its behavior is always a problem. One, "gov't is glacial". Two, "gov't is lazy". Third, "gov't is plagued with the Pavlov Rule". Dimitri Emailovitch Pavlov was the Kommissar in Charge of food and relief for the besieged city of Leningrad. ln is 1959 memoirs he wrote that despite the tragic circumstances within the city, his work was plagued by locusts and egoists.

Link to comment
Share on other sites

  • 5 years later...
  • Forum Administrators

The Chinese version

Quote

China's social credit system expands that idea to all aspects of life, judging citizens' behaviour and trustworthiness. Caught jaywalking, don't pay a court bill, play your music too loud on the train — you could lose certain rights, such as booking a flight or train ticket. "The idea itself is not a Chinese phenomenon," says Mareike Ohlberg, research associate at the Mercator Institute for China Studies. Nor is the use, and abuse, of aggregated data for analysis of behaviour. "But if [the Chinese system] does come together as envisioned, it would still be something very unique," she says. "It's both unique and part of a global trend."

https://www.wired.co.uk/article/china-social-credit-system-explained

Link to comment
Share on other sites

  • Forum Administrators

Blood donation and social credit

Blood donations are an area where the capitalist market has an uneasy relationship with our daily lives. Money can incentive people to give blood for all the wrong reasons and the supply may not be as good as you'd like:

Quote

Blood is an unusual product in a market economy: donors give it freely to strangers. Titmuss concluded that if this gift was commercialised, donors would feel less inclined to donate blood without payment and would face incentives not to disclose diseases.1 The opposing view is that the most efficient way of rationing a scarce product like blood is to put a price on it and let a market develop in which it can be traded.2

https://www.bmj.com/content/312/7039/1131

 

But there are alternatives - where social credit could fit neatly

Quote

The debate over paying for plasma has been simmering for years. There are questions, too, over what constitutes compensation. Though only those four countries — Germany, Austria, Hungary and the Czech Republic — give a flat-fee payment, many others offer non-monetary compensation like time off work or vouchers. In the U.S., the average payment per plasma donation is $80-85 including bonuses, said Hotchko.

https://www.politico.eu/article/blood-money-europe-wrestles-with-moral-dilemma-over-paying-donors-for-plasma/

Link to comment
Share on other sites

  • 2 months later...

Join the conversation

You are posting as a guest. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

×
×
  • Create New...