Capitalism 3.0: A Guide to Reclaiming the Commons

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The commons - those creations of nature and society we inherit together and must preserve for our children - is under siege. Our current version of capitalism - the corporate, globalized version 2.0 - is rapidly squandering this heritage. Now, Peter Barnes offers a solution: protect the commons by giving it property rights and strong institutional managers. Barnes shows how capitalism - like a computer - is run by an operating system. Our current operating system gives too much power to profit-maximizing corporations that devour the commons and distribute most of their profits to a sliver of the population. And government - which in theory should defend the commons - is all too often a tool of those very corporations. Barnes proposes a revised operating system - Capitalism 3.0 - that protects the commons while preserving the many strengths of capitalism as we know it. His major innovation is the commons trust, a market based legal entity with the power to limit the use of scare commons, charge rent, and pay dividends - in both cash and services - to everyone. In Barnes' vision, an array of commons trusts would institutionalize our obligations to future generations, fellow citizens, and nature. Once established, they'd use markets and property rights to create a better world for us all. Capitalism 3.0 offers a practical alternative to our current flawed economic system. It points the way to a future in which we can retain capitalism's virtues while mitigating its vices.

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Chapter 1 Time to Upgrade

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Society is indeed a contract between those who are living,
those who are dead, and those who are to be born.
Edmund Burke (1792)

For the first time in history, the natural world we leave our children will be frightfully worse than the one we inherited from our parents. This isnt just because were using the planet as if there were no tomorrowthats been going on for centuries. Its because the cumulative weight of our past and present malfeasance has brought us to several tipping points. Nature has her tolerance limits, and weve reached many of them. In some cases, very possibly, weve passed them.

Consider, for example, our atmosphere. Its not just todays pollution that hurts, its the accumulation of fumes weve been pouring into the air for centuries. This has already caused ice caps to melt, hurricanes to gain ferocity, and the Gulf Stream to weaken. Almost universally, the worlds scientists warn that far worse lies ahead. The question our generation faces is: will we change our economic system voluntarily, or let the atmosphere change it for us?

 

Chapter 2 A Short History of Capitalism

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They hang the man and flog the woman
That steal the goose from off the common
,
But let the greater villain loose
That steals the common from the goose
.
English folk poem, ca. 1750

Before we consider how to upgrade our economic operating system, its worth contemplating how it came to be. Two parallel threads emerge: the decline of the commons and the ascent of private corporations.

In the beginning, the commons was everywhere. Humans and other animals roamed around it, hunting and gathering. Like other species, we had territories, but these were tribal, not individual.

About ten thousand years ago, human agriculture and permanent settlements arose, and with them came private property. Rulers granted ownership of land to heads of families (usually males). Often, military conquerors distributed land to their lieutenants. Titles could then be passed to heirstypically, oldest sons got everything. In Europe, Roman law codified many of these practices.

Despite the growth in private property, much land in Europe remained part of the commons. In Roman times, bodies of water, shorelines, wildlife, and air were explicitly classified as res communes, resources available to all. During the Middle Ages, kings and feudal lords often claimed title to rivers, forests, and wild animals, only to have such claims periodically rebuked. The Magna Carta, which King John of England was forced to sign in 1215, established forests and fisheries as res communes. Given that forests were sources of game, firewood, building materials, medicinal herbs, and grazing for livestock, this was no small shift.

 

Chapter 3 The Limits of Government

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Civil government, so far as it is instituted for the security of property,
is in reality instituted for the defense of those who have
some property against those who have none at all
.
Adam Smith, 1776

In his essay The Tragedy of the Commons, Garrett Hardin envisioned only two ways to save the commons: statism and privatism. Either a coercive government would have to stop humans from mindlessly destroying the planet, or private property owners, operating in a free market, would have to do the job. In the next two chapters Ill show why neither of these approaches suffices.

In considering the potential of governmental remedies, lets clarify what we mean. Were not talking about tyranny; were talking about legitimate forms of government activity such as regulation, taxation, and public ownership. Can these traditional methods effectively preserve common wealth for our children?

The notion that government should protect the commons goes back a long way. Sometimes this duty is considered so basic its taken for granted. At other times, its given a name: the public trust. Several states actually put this duty in writing. Pennsylvanias constitution, for example, declares: Pennsylvanias public natural resources are the common property of all the people, including generations yet to come. As trustee of these resources, the Commonwealth shall conserve and maintain them for the benefit of all the people. Note that in this constitutional dictum, serving as trustee of natural resources isnt an option for the state, its an affirmative duty.

 

Chapter 4 The Limits of Privatization

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The corporation is an externalizing machine, in the same way that a
shark is a killing machine. There isnt any question of malevolence or of
will. The enterprise has within it, as the shark has within it, those
characteristics that enable it to do that for which it is designed.
Robert Monks, 1998

Its tempting to believe that private owners, by pursuing their own self-interest, can preserve shared inheritances. No one likes being told what to do, and words like statism conjure fears of bureaucracy at best and tyranny at worst. By contrast, privatism connotes freedom.

In this chapter, we look at Garrett Hardins second alternative for saving the commons: privatism, or privatization. I argue that private corporations, operating in unconstrained markets, can allocate resources efficiently but cant preserve them. The latter task requires setting aside some supplies for future generationssomething neither markets nor corporations, when left to their own devices, will do. The reason lies in the algorithms and starting conditions of our current operating system.

 

Chapter 5 Reinventing the Commons

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Imagination is more important than knowledge.
Albert Einstein, 1929

Thus far Ive argued that Capitalism 2.0or surplus capitalismhas three tragic flaws: it devours nature, widens inequality, and fails to make us happier in the end. It behaves this way because its programmed to do so. It must make thneeds, reward property owners disproportionately, and distract us from truer paths to happiness because its algorithms direct it to do so. Neither enlightened managers nor the occasional zealous regulator can make it behave much differently.

In this part of the book I advance a solution. The essence of it is to fix capitalisms operating system by adding a commons sector to balance the corporate sector. The new sector would supply virtuous feedback loops and proxies for unrepresented stakeholders: future generations, pollutees, and nonhuman species. And would offset the corporate sectors negative externalities with positive externalities of comparable magnitude. If the corporate sector devours nature, the commons sector would protect it. If the corporate sector widens inequality, the commons sector would reduce it. If the corporate sector turns us into self-obsessed consumers, the commons sector would reconnect us to nature, community, and culture. All this would happen automatically once the commons sector is set up. The result would be a balanced economy that gives us the best of both sectors and the worst of neither.

 

Chapter 6 Trusteeship of Creation

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God gave the care of his earth and its species to our first parents.
That responsibility has passed into our hands.
National Association of Evangelicals
, 2004

Gifts of creation were produced only once and are irreplaceable. By contrast, products traded in markets tend to be massproduced and highly disposable. Its hard to imagine a deity whod view such temporal goods as equivalent to his or her enduring handiwork. The question is whether creations irreplaceable gifts are different enough to merit different treatment by our economic operating system. A strong case can be made that they are.

The case is moral as well as economic. The moral argument is that we have a duty to preserve irreplaceable gifts of creation, whereas we have no comparable duty toward transient commercial goods. The economic argument is that any society that depletes its natural capital is bound to become impoverished over time. I find both lines of argument convincing.

But whats the reality today? Here we encounter two disconcerting facts. The first is that there are very few property rights protecting natures gifts. With the exception of a few set-asides such as parks and wilderness areas, we subject creations gifts to the same rules as Wal-Marts merchandise. The second is that the right of corporations to profit dominates all other rights.

 

Chapter 7 Universal Birthrights

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We hold these truths to be self-evident, that all men are created equal,
that they are endowed by their Creator with certain unalienable Rights,
that among these are Life, Liberty and the pursuit of Happiness
.
U.S. Declaration of Independence, 1776

Capitalism and community arent natural allies. Capitalisms emphasis on individual acquisition and consumption is usually antithetical to the needs of community. Where capitalism is about the pursuit of self-interest, community is about connecting toand at times assistingothers. Its driven not by monetary gain but by caring, giving, and sharing.

While the opportunity to advance ones self-interest is essential to happiness, so too is community. No person is an island, and no one can truly attain happiness without connection to others. This raises the question of how to promote community. One view is that community cant be promoted; it either arises spontaneously or it doesnt. Another view is that community can be strengthened through public schools, farmers markets, charitable gifts, and the like. Its rarely imagined that community can be built into our economic operating system. In this chapter I show how it can beif our operating system includes a healthy commons sector.

 

Chapter 8 Sharing Culture

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He who receives an idea from me, receives instruction himself
without lessening mine, as he who lights his taper at mine,
receives light without darkening me.
Thomas Jefferson, 1813

So far Ive focused on the commons of nature and community. In this chapter I explore the third fork of the commons river, culture. By this I mean the gifts of language, art, and science we inherit, plus the contributions we make as we live.

Culture is a joint undertakinga co-productionof individuals and society. The symphonies of Mozart, like the songs of Lennon and McCartney, are works of genius. But they also arise from the culture in which that genius lives. The instrumentation, the notation system, and the prevalent musical forms are the dough from which composers bake their cakes. So too with ideas. All thinkers and writers draw on stories and discoveries that have been developed by countless men and women before them. To paraphrase Isaac Newton, each generation sees a little farther because it stands on the shoulders of its predecessors. In this way, all new work draws from the commons and then enriches it. To keep art and science flourishing, we have to make sure the cultural commons is cared for.

 

Chapter 9 Building the Commons Sector

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If you dont know where youre going,
you probably wont get there.
Yogi Berra

My sons play a computer game called Sim City. Its a brilliant invention that lets you design, grow, and govern your own virtual metropolis. You plunk down streets, sewers, power systems, and subways. You zone for commerce, industry, and residences. You drop in schools, hospitals, and fire stations. Soon a city comes to life. Its enough to engross kids for hours.

Now imagine an adult game called Sim Commons that lets you design and grow your own virtual economic sector. The object of the game is to produce the most happiness with the least destruction of nature. You plunk down commons trusts, and from simple menus you assign them property rights, ownership regimes, and management algorithms. As you play, the computer displays your happiness and nature scores. Through trial and error, you learn what combinations of moves work best.

In the real world, building a new commons sector will be something like that. While we wait for an historic shift at the national level, we can build and experiment at lower levels. We can test different kinds of trusts, nonprofits, and informal associations, seeing how closely they can hew to commons principles. Then, when history is ready for bigger changes, well be ready too.

 

Chapter 10 What You Can Do

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Two roads diverged in a wood, and II
took the one less traveled by,
And that has made all the difference.
Robert Frost, 1920

We come at last to the inescapable question: What can each of us do to help build Capitalism 3.0?

Earlier, I noted that corporations dominate American government most, but not all, of the time. Once or twice per century, there are brief openings during which noncorporate forces reign. No one can say when the next such opening will occur, but its safe to say that it will. We must be ready when it comes to build a strong, self-perpetuating commons sector, not easily dismantled when the political wheel turns again.

Being ready then means getting busy now. We should, first of all, start noticing and talking about our common wealth. Whenever we see it, we should point to it and let the world know to whom it belongs.

Second, we should demand more birthrights and property rights than we have now. Rights that belong to everyone. Rights built into our operating system. Rights that protect future generations as well as our own.

 

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