Sharing is coming to a purse or wallet near you soon, and not to ask for a donation. Silicon Valley startup Openyear is building its first product, Open Pay, which will enable you to share your pay with those that influence you. I lunched with Openyear CEO Joe Hentz Friday to learn about this service, which is a few months away from launch. (Sign up for the beta launch here!)
Openyear is creating a platform for something that already happens in some settings. The video below talks about real-world cases where it was smart to share pay, explains how Openpay will work, and answers why we should care about income inequality.
Open Pay has an interesting connection to an article we posted on Sunday about why sharing and income inequality don't mix. Those left out of the economic spoils can lash out by damaging sharing systems, as what happened recently with the bike sharing system in Paris. Joe shared with me the other side of the same coin--that adequate earning enables us to share. He pointed out that we have to earn before we can contribute code to an open source software project, give away stuff on Freecycle, or donate to our favorite nonprofits. Reducing income inequality may be key to not only making sure sharing systems are secure but also increasing the number of people who can participate in the sharing economy.
What I like about open pay as a concept--something that Joe emphasized in our meetup--is that it's a voluntary means to reduce income inequality. The voluntary approach is logically consistent with a peer economy, is more personally meaningful than tax, and may be more sustainable since it can't be rolled back when political winds shift.
That being said, there's no silver bullet to income inequality. A skillfully blended cocktail of solutions is probably what's needed. One advantage of Openpay, however, is that it addresses classic challenges of collective action - freeriding and incentive. Free riding is the tendency of some to benefit from collective action of others without contributing. Open pay only rewards those who actually either share pay or help earners. There is no chance to freeride. And in terms of incentive, earners attract loyal helpers by rewarding contribution. And helpers get paid for contribution.
One downside to Open Pay is that it may only work to close the gap between the upper and middle class income. I'm not sure that a migrant agricultural worker, for instance, will often be in a position to help the CEO of a major corporation. Those on the other side of the digital divide may be left out as well since the service will rely on software to track influence as transmitted through computers and cell phones.
Overall, it's a bold idea. I'm looking forward to the beta launch. You can sign up to get a beta invite on the right side of Openyear's homepage.
Thumbnail infographic of Gini Coefficient (a measure of income inequality) by country 2007-08 courtesy of Wikimedia Commons.
Comments
Neal Gorenflo wrote on 11.03.09, 6:03pm:
Joe, great points. I to believe that strengthening the middle class is the key to change. Actually, Saul Alinsky, the father of community organizing, said in an interview just before his death in 1972 that his next project would be to organize the middle class. He thought doing that was the real key to change. He had up to that point spent most of his career organizing working class neighborhoods or helping others to organize them through the Industrial Areas Foundation.
Alinsky was a sociologist by training and thought that the middle class was ripe for organizing because of the spiritual malaise and disconnection he saw. He believed that they could be mobilized to counter corporate power, strengthen democracy and the economy, and find meaning and connection in the process. And that this would be the best way to help the working class and poor.
Instead what happened was that politicians mobilized the middle class against itself and the working class and poor. Both parties in the US are implicated in this as well as the press. And to a lesser extent the middle class itself for buying nearly wholesale into an ideology which pitted classes against each other and gave corporations free reign, all to their detriment. In any case, I think the economic mess we're in globally is largely the result of class warfare instigated by US politicians to benefit corporations.
I had hoped that Obama would realize Alinsky's vision. His presidential campaign had many of the markings of an Alinsky-style drive to organize the middle class, with skillful use of the Internet mixed in. This evolution made perfect sense to me as Obama had been a community organizer in Chicago, the very place Alinsky innovated many of the strategies in use today, and was steeped in Alinsky-style rhetoric and strategies. In fact, the phrase "Yes we can" was "borrowed" from Cesar Chavez, an Alinsky student, who used "Se si puede," the Spanish equivalent, to rally farm workers in California and beyond beginning decades ago. It really did look and feel like Obama was organizing the middle class.
And for a while it looked like Obama would keep his amazing network of supporters - that cost $750 million to assemble - intact beyond the campaign to help him push through middle and working-class friendly reforms and make good on Alinsky's vision. Alas, he did not do this. What a gigantic waste. To me it looks like Obama's been absorbed by the borg that is DC. He sure could have used that amazing energized mass built in his campaign to help push through a sensible health care bill.
The bottom line for me is that let's not get fooled again into believing it's a bad idea to help one another.
Or wait for a savior. Or a policy fix.
We should not give up on the political process or Obama and other promising politicians round the world to join us in building a more sensible and sustainable global society.
However, let's not count on others to do what we were made to do ourselves - help each other. We should not outsource sharing. I believe the meaning, pleasure, and effectiveness of it's lost otherwise.
This is why the idea of open pay, a P2P solution to income inequality, is so attractive to me.
joe hentz wrote on 11.04.09, 3:21am:
Neal, your line
"Or wait for a savior. Or a policy fix. "
nails it. It identifies the box where most people tend to stay. The frame of being governed is similar to the notion of being a patient. Both constructs delegate power to representatives, or doctors, respectively. Both constructs imply waiting for a result.
People feel more empowered in the consumer frame. Maybe the call to action in our time requires that rIGHTS get delivered as PRoducts, or a PRIGHT. A pright, like Google books, provisions the right to access the world's largest library.
Rather than wait for government, maybe we should think on how to productize the rights we want.
Neal Gorenflo wrote on 11.04.09, 8:22am:
Radical idea Joe! I'll have to ponder that one for a while. It's real mind bender, which I appreciate.
I do think we should find ways to make engagement with each other and civil processes as fun and easy as companies make it to engage with products. Jane McGonigal and ITFT talk about an "Age of Engagement" and the use of game constructs to get and keep people engaged in important processes.
So I guess I would lean toward creating experiences of rights rather than product izing rights, though I think we're really thinking along the same lines here - packaging them in a new more useful way.
Thanks Neal for taking the time to think about Open Pay. It's true that we'll only be able to share pay based on influence for people when they're using digital devices. So, we won't be able to help people on the "have not" side of the digital divide directly. But, a couple points are worth noting. First, as inequality falls, poverty incidence tends to fall. As inequality rises, poverty reduction tends to stall. Second, middle class people, on average, give a higher % of their income to charity than do the wealthy. So, when the middle is strengthened, the bottom is strengthened too.
I agree with your take on the bike sharing system breakdown in Paris. The Gini coefficient is a formal measure of inequality. A Gini of 1 means 1 person has all the wealth, and everyone else has none. A Gini of 0 means everyone has equal wealth. Sweden has a Gini of 23, France 29, the US, 45, Brazil, 57.
If such data are available, chart sharing system breakdowns against a country's or city's Gini and see what you find. It may be that sharing systems are more likely to breakdown as Gini rises.
Earning satisfies a substantial number of the needs on Maslow's hierarchy of needs. We're economic as well as spiritual beings. Everybody's gotta earn.