#08 Community Capitalism: Transforming capitalism through community empowerment

How communities can use capitalism to create a shared economy that works for everyone

Community capitalism argues that firms should not focus solely on their customers, but on communities — so that all members of the community succeed and all stakeholders benefit, over time.

It is closely linked with the idea of community empowerment, which involves giving communities the tools, resources, and decision-making authority needed to improve their own well-being and influence local economic development.

Community capitalism focuses on fostering economic growth and development at the community level. It recognizes that economic activity isn't solely the domain of large corporations but can also involve local businesses, cooperatives, and social enterprises.

The community economies are shifting away from traditional capitalism and giving way to community capitalism — an economy in which the company burns brighter by taking care of everyone involved, not just a privileged few. Consumers are happy to pay to be part of these communities because they are included in the rewards.

In this model, the community is king. It places a priority on the well-being and sustainability of the community. This can include all kinds of communities. It can be the ‘real’ community, like a town, a metropolitan area or an entire region. This approach to capitalism departs further from the 'shareholder value capitalism' version. It recognizes that communities create both short and long-term value for firms—and not just one, homogeneous group, like staff, shareholders or customers.

Businesses operating within a community under the principles of community capitalism are expected to prioritize not only profits but also social and environmental concerns. This can include community-based financing, impact investing, and crowdfunding campaigns aimed at supporting local businesses.

A sense of being part community

The best example is Huaxi, the richest village in China. According to the shared-economy system, businesses in villages are collectively owned, wealth is shared and incentives are high.?

Huaxi actually functions more like a company or organization than a village in general, and the villagers are "shareholders in this organization". The village's founder and former headman, 84-year-old Vu R?nbao, has transformed the village from an agricultural basin into an advanced industrial center.?

Surplus profits from the village's assets are shared among the villagers. Upon entering the village, the face of the roads and the surrounding area suddenly changes with luxurious and spacious villas as well as luxury cars attracting attention. A few years ago, every family in the village received a car as a gift from the surplus money.

In Sweden, for instance, the founder of IKEA Ingvar Kamprad is not liked much because he lived in Switzerland for years since the 1970s to avoid paying higher taxes at home. He returned to Sweden only a couple of years ago. Anyone you ask in Sweden will tell you that don't like him much because 'he sent all his money outside Sweden and did not invest enough in our community'.

Community Empowerment

Empowering a community means giving its members a greater say in decisions that affect their lives, including economic decisions. It involves ensuring that community members have the opportunity to participate in shaping local economic policies and priorities. Communities should have access to the resources they need for sustainable economic development, including education and training, infrastructure, and financial support. Empowerment involves removing barriers to accessing these resources and strengthening the bonds and networks within a community, fostering trust and collaboration among community members.

Also includes efforts to build the skills, knowledge, and leadership capabilities of individuals and organizations within the community. This can involve providing training and education opportunities.

Community's emotional power

Community members develop relationships with each other rather than a one-way parasocial relationship with the company, product or brand. These connections between community members are the real secret behind the emotional power of a community. They keep people coming back willingly, which gives the community its own momentum to grow and achieve the common goal.?

So the community can have an increasing impact over time.