How “independent” capitalism will replace our stagnant economic system

An excerpt from Creative IntelligenceCreative Intelligence

by Bruce Nussbaum

The need to reconnect creativity with capitalism has never been greater.

An effective market theory has fostered an economic system that over the past two decades has generated few innovations in most businesses, weakened the middle class, widened inequality, and led to the relative decline of the United States. We must trade an economy of efficiency for an economy of creativity. We should move away from an economic model based on the “culture of control” towards a new model which embraces a “culture of chance”.

Which begs the question: What do we need instead? What model can replace financial capitalism?

We start to see the evidence of what I call independent capitalism. My use of the word “indie” is deliberate. “Indie” reflects an economy independent of the mainstream orthodoxies of economic theory and big business. It shares many distributive and social structures of the independent music scene, which shuns big promoters and labels. And as is the case with many groups, so many successful creative endeavors today started as local phenomena before branching out into new places and networks.

Independent capitalism is reinforced by one simple and unique fact: New firms (those under five years old) have been the source of all net new jobs in the United States over the past three decades. We celebrate the entrepreneur (including those within companies who behave like entrepreneurs) because we value the creativity of the entrepreneur. It is this creativity that we must place at the heart of our economy and our economic thinking.

But moving from creativity to creation requires a scale. This scale comes in two forms: capital and markets. Creators themselves generally do not have access to capital or markets.

#### Bruce Nussbaum

##### On

Bruce Nussbaum is Professor of Innovation and Design at Parsons The New School of Design and former Associate Editor of * Businessweek *. Nussbaum is the author of the forthcoming book [*Creative Intelligence*](

Crowdfunding is another way to dramatically increase the number of new businesses, allowing entrepreneurs to bypass the venture capital hierarchy and giving all of us a chance to be directly involved in the formation and growth of startups. Capitalism is not just a market phenomenon; it exists in a social context. Capitalism is a social movement. Social networks are the building blocks of the economy.

Kickstarter, for example, has changed what it means to be a creator and a capitalist, a maker and a patron. It is a site, and a community, which makes all of us potential actors in the creation process and gives us all the potential to become entrepreneurs. On one level, Chen, Strickler, and Adler have built a crowdfunding model. In another, they developed a crowd-building site, because Kickstarter not only raises money, but also creates an audience – and a uniquely invested audience, on top of that. The experience is not a simple transaction like buying a work of art in a gallery or an album on iTunes. It’s deeper and richer.

Markets will continue to play a vital role in independent capitalism, but the blurring of the line between creators, curators, funders and consumers will make it less transactional. People will be more directly involved in every step of the creation, using social media and making their own choices about the design, funding and consumption of the products, services and experiences they want. They will extend their “playlist skills” beyond their music collections and across the spectrum of business, healthcare, education and, eventually, politics.

If independent capitalism were to have one basic principle, it would be this: Creativity drives capitalism. Creativity is a source of economic value. Creativity turns what money cannot buy into what money can buy.

Extract of Creative intelligence by Bruce Nussbaum. Copyright 2013 by Bruce Nussbaum. Reprinted courtesy of HarperBusiness, an imprint of HarperCollins Publishers.

Home page image: KK + / Flickr

Wireframe Opinion Editor: Sonal Chokshi @ smc90

Leave a Reply

Your email address will not be published.