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4 Reasons Why The Future Of Capitalism Is Homegrown, Small Scale, And Independent

This new system, Bruce Nussbaum writes, isn't just about startups and venture capitalists; it's based on a community of makers.

You won’t learn about it in business school, hear about it from Wall Street, or see it in Palo Alto. But if you spend time in Bushwick, Brooklyn, or on Rivington Street in Manhattan, you just might detect the outlines of an emerging "indie" capitalism. This new form of capitalism is not just about conventional startups and technology and venture capitalists. If you add up all the trends under way today, I believe we are beginning to see the start of something original, and perhaps wonderful. It may prove to be the economic and social antidote to the failed financial capitalism and crony capitalism that no longer delivers economic value in terms of jobs, income, and taxes to the people of this country.

It’s too early to define the exact shape of this latest iteration of capitalism, but what indie capitalism appears to have is a distinct sensibility. Let’s take a look at a few key features.

Indie capitalism is local, not global, and cares about the community and jobs and says so right up front. Good things come from and are made locally by people you can see and know. The local focus makes indie capitalism intrinsically sustainable—energy is saved as a result of a way of life, not in an effort to reach a distinct and difficult goal.

Indie capitalism is socially, not transactionally, based. It’s not just Internet social, involving 5,000 friends, but personally social. Take Kickstarter, for example, where people fund the music, books, and products that they can watch develop over time. In this model, consumer, investor, audience, fan, helper, and producer conflate. People find and prepare their food the same way they find and prepare their music. And then they share it all.

But before they show and tell, people make. Indie capitalism is, above all, a maker system of economics based on creating new value, not trading old value. It embraces all the strains of maker culture—food, indie music, DIY, craft, 3-D digital fabrication, bio-hacking, app enabling, CAD modeling, robotics, tinkering. Making is not a rare act performed by a few but a routine happening in which just about everyone participates. Making and using tools are part of a meaningful existence. And tools shift from a ritual presence to a practical role in everyday life. Having great tools and making great things begin to replace consumption as an end in itself. Wieden + Kennedy get it with their ads for Chrysler. The "Imported from Detroit"[a] signals the shift in sensibility to "local." And the "The Things We Make, Make Us" tagline for Jeep gets the new make culture: "This has always been a nation of builders. Craftsmen. Men and women for whom straight stitches and clean welds are a matter of personal pride… This, our newest son, was imagined, drawn, carved, stamped, hewn and forged here in America." And Dan Provost, who, with Tom Gerhardt, launched his Glif iPhone camera stand on Kickstarter, perfectly sums up the new outlook: "One thing that has greatly pleased Tom and I about the success of this project is its inherent simplicity: We are just two guys who made something people want to buy, and then we sell it to them. No middle men, no big corporations, no venture capital, no investments. I think beyond the interest in the Glif itself, people like to know where things are coming from, and the story behind it."

Another indie capitalism characteristic is a heightened meaning embedded in materials and products. Making fewer things of higher quality and utility is important. Reusing and sharing really good stuff is valued. The touch and feel of things, from Apple products to vintage Levi’s jeans to beautifully made (but unlabeled) dresses, are important. The entire notion of brand is upended in indie capitalism, superseded by the community surrounding the creation of a product or service. Authenticity is the "brand" in many cases.

A while back, the futurist Paul Saffo predicted a new "creator economy" replacing the industrial and consumer economies. I like the term but prefer "indie capitalism" because it captures more of the social context and values of this new economy. I think it is sufficiently different from the entrepreneurial, startup culture of Stanford/Silicon Valley to warrant its own name. The term feels more 21st century, while "startup" sounds, well, 20th century. It’s socially focused, not technology focused, more designer/artist-centric than engineering-centric. I especially like "indie" because the indie music scene reflects many of the distributive and social structures of this emergent form of capitalism. It’s no accident that Portland and New York have vibrant indie music scenes and are the centers of a rising new indie capitalism.

Occupy Wall Street is the most powerful movement of recent decades, and its questioning of the basics of big corporate global capitalism comes as the voices of mainstream critics question the efficacy and legitimacy of our current economic system. The Harvard Business Review has been running a series of pieces criticizing finance capitalism. Foreign Affairs has been writing about the split between robust global corporate profit-making and negative domestic job-making. Even cable TV financial journalists are publicly talking about the failure of Wall Street to do its traditional job of financing business formation. And cries of crony capitalism can be heard from both the Tea Party as well as Occupy.

I think that rising before us may be the solution to all that. Indie capitalism could be the kind of reinvigorated capitalism that we can all believe in again. To make it really work, we might need a new indie economics (of creativity and innovation), plus a new indie set of political policies.

What do you think?

[OWS Image: Flickr user shehan365]

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  • Mark Barden

    Great piece, Bruce. I hope this turns into a juggernaut trend and finds its way out of Portlandia and Brooklyn and into the middle where it would surely do a lot of good and be welcomed with open arms. Real community (vs. online) is alive out well out there, but it's looking for ways to reinvent how it trades, does business, values. this could be a start

  • Lyndsay

    love this article, start growing your own food.  share with your friends and family, make something old something new.

  • Rich

    Does not all business come from "indie capitalism"?  At what point do we graduate to corporate monster.  How big are we allowed to grow before we are labeled as corporate? 

  • Jefftoaster

    EXCELLENT questions - all businesses had to start somewhere, but so many people cry, "Evil!" whenever they see "big box" stores and mega-congloms, ALL of which started out smaller than they are now (many as "Mom and Pop" stores), and succeeded by providing customers what they want at a competitive price.  Maybe there were some warm fuzzies along the way, I'd like to think that, but to make the warm fuzzies the primary goal of any business is a fool's errand.

  • Sbaden11 is a perfect example of indie capitalism. Great example of "socially focused, not technology focused, more designer/artist-centric."

  • Ralphcordova1970

    Interesting piece. I appreciate the articulation of familiar economic concepts, and, how these concepts are being transformed into new locally-relevant approaches, rather than simply reforming and replicating them. The notion of locally-relevant, socially-constructed, creating new value and not proffering the tired old things; and heightened value of well-made products...these four are directly related to how our professional learning community sees itself in its professional development work it does. In part we think this way, because many of us are long-standing members of the National Writing Project, a teachers-teaching-teachers (teachers as makers) approach. NWP is not top-down, but bott0m-up and locally relevant. Our CoLab has many NWP members who have developed approaches, taught them to each other, and in the process (remarkably identical to Nussbaum's ideas) come to see themselves as 'professionals-developing-professionals'. Here's the the local economies, all in their own processes of building-to-learn. And here's to social media as the portals for interacting with and learning from all the local, to develop a more global conscience of who we are a global-macro economy only strong by vibrant local ones.

  • Pervysage12

    This is what anarcho capitalists have been advocating for a LONG time. Read Lew Rockwell ...    How is this new?

  • David Sandusky

    We are seeing this in full bloom in Denver and it does feel like just the beginning. Very exciting. In Denver a concept called DIBs (Denver Independent Boutiques) offer products mostly made in Denver and just how you describe. It is very rewarding to shop this way and have our items purchased this way too! 

  • greg

         I am very tired of hearing ignorant people bash capitalism. Capitalism is what keeps the economic engine running smoothly and without
    problems. Corporate cronies are not created by capitalism but by government intervention.  The more rules, regulations and burdens placed on the back of the business the more the large business has  leverage over the smaller ventures. Government intervention contaminates the
    capitalistic system.  The more rules, the more you need an attorney, the more regulations, the more you need someone to interpret the laws. If it were an unfettered capitalistic model the small guy would have a great chance to compete head to head with the big guy.I see nothing wrong with a successful company growing to a point that they are in a position to purchase a smaller company and incorporate the smaller companies resources and talents. 
        Everyone in business should have an equal chance to make it to the top but that is not possible. I agree that corporate cronies are hurting this country but its not because of capitalism. Its because of the career government officials that continue to create new and costly requirements
    for businesses to follow. These large companies are forced to play
    without rules so they can survive. These politicians are totally aware of this and they line their own pockets by creating burdensome rules for companies to follow.
          Perfect example: obama creates this enormously ridiculous health care program. Later the Mcdonalds, Unions and 600 additional large employers realize the cost will ruin their business. What to do???
    Strike a deal with obama give him political contributions and he then gives mcdonalds and the unions exemptions from all health care requirements. 

    Now should capitalism be blamed for this situation or the politician.

  • AmberJ

    Uh, where do you see anything that says to have the gov't intercede in the free market?  In this article I see the idea of community helping each other in a form of capitalism.  If this really is a "free market" country why does this idea upset you so much to go on a rampage on this article?  I believe that you have a chip on your shoulder about the policies and procedures of the gov't and the representatives, not about the idea of "Indie Capitalism".  This article says nothing about Obama, Congress or any other gov't official.  Where do you get the idea that it is all on our present gov't representatives?  The deterioration of crony capitalism starts with Reagan, not with Obama or even Bush.  This is an IDEA for individual's that choose to embrace   It doesn't harm our countries free market system, it would actually make it stronger due to the personal relationship with the community and the business.  All it's basically saying is Made in America, Owned by American's is better than going with monopolized corporations that provide 95% Made in China products and has NO connections to the communities that they are apart of.  Small business rather than Big business.  What is so wrong with that idea?  Must you make this wonderful idea into something terrible and unjust?  This form of capitalism could help our country with the opportunity for people to pursue happiness.  Isn't that what our country is really all about, the pursuit of happiness?  Well, this idea allows that to happen. Don't knock what you don't understand.  If you think this has to do with politics, your on the wrong site.  You need to do more research on the subject rather than spouting off like you know what's going on.  Just my opinion and my 3rd party observation.  I'm not trying to be mean Greg, I just think that you should have maybe visited a few other informational sites about Indie Capitalism before you made this comment.  Maybe you should revise it once you've discovered the true meaning of this new wave of free market really means.  

  • Gfb333

    I have been designing, inventing and producing products for 35 years.
    The business concepts discussed here are nothing new. This way of doing business is very good and healthy, however not everyone can be
    satisfied with a small shop. Many people want to share their product with the world, myself included. A few successful companies succeed in growing a global business but keep the business model of a small personalized
    operation. I don't believe a country can survive with all small personalized products.

    On the other hand it's very feasible for a company to share their products with the world by setting up small assembly facilities around the world.  similar to the way the car companies are doing today. You don't have to be as large as the car companies and you could certainly keep your personal  community approach.

    I think its very difficult to predict the future especially in business. 

  • Emily Blistein

    Indeed! I own a small shop in Middlebury Vermont and about 1/3 of my products are handmade from independent artists and designers. In addition to what is mentioned here, I would add that these "vendors" make the process of "doing business" infinitely more enjoyable: I have coffee dates with them to look over their products, the letterpress artists send orders that are packaged so beautifully, it's like unwrapping a gift, and I have email correspondences with people I've never met who - I think in large part because of this shared goal of slow, thoughtful quality indie commerce - I quickly connect with, sharing business goals as well as personal and family accomplishments. In my world 'business', 'commerce' and 'retail' are invigorating and that I'm certain that's due entirely to this new way of being in business and my fellow entrepreneurs.

  • David W. Cooney

    Lots of people are opening their eyes and realizing that the good things possible through Capitalism get corrupted as large companies swallow-up the small, crush local businesses, and then use their economic power to corrupt the politicians to pass regulations and tax codes that favor them.

  • zopdeep

    It's 20 years away, but just wait until every house has a 3D printer. Talk about cutting out the middleman. This will cut out logistical manufacturing and shipping on a global level. 

  • freedom1

    This is about business coming full circle. This is what America is all about.

  • Jared

    I enjoyed your article, Bruce. Thank you.

    Your point on being personally social is key for all businesses to connect with their community (customers). The indie movement captures this nicely.

    Its challenges is its ability to scale as its appeal increases. One can say the whole point of the indie movement is to not scale and to stay small and personable, but that is a developing-nation model. Anything that becomes popular must be able to grow or it eventually dies. Apple incorporates aspects of the indie movement but is very much a capitalistic business.

    Capitalism as we know and have known it for many years is not going away nor should it. There are obvious weaknesses which you rightfully list. Large multinational corporations will continue to play a key role in creating jobs and economic growth, as will wonderful movements like the indie.