Why Do We Need a New Economic Model?

Abstract

Discover what led today’s economic systems to become so complex, costly, and conflict-prone — and how the Collaborative System Design approach can help us build a new model from first principles, fostering collaboration, wealth creation, and common prosperity.

Introduction

Our modern capitalist economies mostly function according to what we can call the conventional economic system – a vast and intricate patchwork of principles, regulations, institutions, common practices, and legacy structures. This system has evolved through centuries of negotiation, political compromise, power dynamics, interest group lobbying, and historical accident. It varies significantly across countries and contexts, but it shares a common characteristic: it has grown layer upon layer over time, without being rethought or designed as a whole.

As a result, it has become highly complex, and that complexity carries real costs — from administrative friction to legal uncertainty. For many would-be entrepreneurs and struggling startups, it can represent an insurmountable barrier.

The Weight of Accumulation

The sheer number of concepts, rules, and mechanisms in today’s economies is overwhelming. These elements have rarely been designed in a coordinated way, but rather added incrementally in response to emerging challenges, political pressures, or sectoral demands.

This fragmented evolution has created a system that is difficult to navigate and harder still to reform. Many mechanisms overlap or contradict one another, and very few are easy to test, analyze, or optimize in practice.

Imagine trying to improve the performance of a computer system that has been patched repeatedly over decades — eventually, the system becomes fragile, opaque, and hard to adapt to new realities.

Furthermore, because the system contains many structural conflicts of interest rooted in zero-sum dynamics, any change that benefits one group of stakeholders often disadvantages another — making meaningful reform difficult and politically contentious.

A Model, Not a Mess

FlexUp proposes a radical alternative: what if we had the opportunity to rethink the fundamentals –  to rebuild from first principles with clarity of purpose and structure?

At its core, an economic model is a simplified mental representation of reality – a framework composed of basic notions, clearly defined terms, and well-structured mechanisms. It allows us to understand, predict, and guide economic behavior. The FlexUp Economic Model is precisely that: a structured and coherent normative model built on transparent, open-source rules and algorithms.

But this is not just a theoretical or academic exercise.

FlexUp’s model is rooted in practice — it is a hands-on, design-driven endeavour that combines economic reasoning with practical implementation. It brings together theory and application, using analysis, experimentation, and iterative feedback as key ingredients of the development process.

Rather than relying on abstract speculation or static principles, FlexUp follows a methodology inspired by technological R&D: define the problem clearly, build working prototypes, test them in real-world conditions, gather feedback, and continuously refine the model and tools.

This approach makes the FlexUp Economic Model not only intellectually sound, but also operationally useful — a model that can be understood, applied, and improved by the people who use it every day.

Simplicity, Fairness, and Alignment

FlexUp’s approach revolves around Collaborative System Design  defining the objectives we care about (such as collaboration, resilience, fairness, and prosperity), and designing mechanisms that are likely to achieve them. These mechanisms are then continuously tested – in simulations, and in the real world.

At the heart of the model is a common remuneration system that treats all participants equally. Whether you are a manager, employee, supplier, investor, or client, you can choose how to split your remuneration across three risk levels:

• Firm (low risk),
• Flex (medium risk),
• Equity (high risk).

The more risk you take, the more tokens you earn – giving you a greater share of profits and voting rights. Payments are made through a cash waterfall system, prioritizing firm-level commitments first, then flexible ones, and finally equity. This makes the flow of funds both predictable and fair, based on clear priority rules.

The FlexUp model does not question the idea that risk must be rewarded — quite the opposite. But in contrast to conventional systems, where risk (and thus reward) is mostly reserved for investors, FlexUp gives everyone the option to take on risk — and to be rewarded on the same terms.

This shift helps resolve some of the structural conflicts built into conventional systems, where participants are treated differently based on their role (e.g. employee vs. shareholder), leading to misaligned incentives and mistrust.

A New Way to Design and Evolve

This isn’t just a one-time blueprint. FlexUp adopts a systematic and iterative approach. The model and its mechanisms are regularly reviewed and refined based on user feedback, data, and observed outcomes. Real-world testing is not just encouraged – it is integral to the model's evolution. 

FlexUp also provides the tools to implement this model: a comprehensive app to manage contracts, orders, payments, and equity; standard legal templates; and a transparent governance framework through the FlexUp Charter. Each element is designed to be interoperable, verifiable, and practical — lowering friction and fostering collaboration across stakeholders.

Toward a Better Economic Software

We live in a world where technological progress is accelerating, but our economic institutions still rely on outdated logic and structures. While we regularly update our tools and platforms, we rarely revisit the deeper logic behind how we organize and distribute value.

FlexUp offers a framework for doing just that: not by opposing the current system, but by proposing an alternative — clearer, more inclusive, and better aligned with the realities of modern collaboration.

FlexUp is not the answer to every problem, but it’s a bold and structured attempt to reimagine how we collaborate, how we share risk and reward, and how we build sustainable businesses and communities. Rather than patching complexity with more complexity, it invites us to rethink the system altogether..