Upgrading to Capitalism 3.0

Protecting the commons from a thirst for profit.

By Graham Webster and Keith White

Peter Barnes is a businessman who wrote a book about capitalism and is giving it away for free as a PDF. Needless to say, the vision for Capitalism 3.0 he puts forth in the book by that title is not your every day capitalism. He calls for the people of the world and their governments to protect “the commons,” a vast under-appreciated store of common wealth, from the forces of profit-maximizing corporations. But he’s no communist. He believes that the pursuit of profit and other features of capitalism can be good, and that our shared wealth should be protected by a system of trusts. His 2001 book, Who Owns the Sky?, argues that if a public trust owned the sky pollution could be kept at bay. But in Barnes’ view, there is much more to be protected.

Campus Progress: What is the commons and how does it get abused?
Peter Barnes: The commons is a generic term, like the market. What it encompasses is those things that we inherit together and create together and have a joint responsibility to pass on, undiminished, to our children. Some of it can be government property, but not necessarily.

There are three baskets or streams: One is all the gifts of nature. Another is all the gifts of society—our infrastructure and all the things built by our society, from our playgrounds and streets, to social insurance and legal systems, and so forth. And lastly there are all the great intellectual and cultural gifts we receive: science, technology, art, music, etc.

The commons is far more valuable than the private wealth we obsess about, and it’s being diminished steadily by our economic system. In particular by the phenomenon of the profit-maximizing, cost-externalizing corporation, which has kind of taken over our economic system in the last hundred years or so. And corporations are, by their very programming, especially when they get to a certain scale, driven to privatize and enclose pieces of the commons and to dump waste and other costs into the commons.

The net effect is that the commons is diminished, while the profits of the corporations are increased. The most serious manifestation of this is climate change, where we have the atmospheric commons, essentially, being dumped in day and night.

The problem is that the commons tends to be unorganized, because no one really owns it. So there is a power imbalance between what is in the commons and the corporation, which are extremely well organized and almost monomaniacal in the pursuit of their mission.

So what you propose in the book is an array of public trusts owing parts of the commons?

Yes, that’s the main thing I talk about in the book. There might be other ways to organize some commons—trusts are not the only way. But the idea is to create legal and institutional frameworks that will protect the commons and manage the commons and preserve their gifts.

Corporations exist within a system of laws that make up their DNA. Why not just reform the structure of the corporation instead of creating a new system?

The corporation has a purpose, and that purpose is to maximize profit. There are times and places where that is fine. We want entities out there driven by a kind of manic efficiency to pursue certain goals, dealing mainly with production and other things we need. I am not against corporations, so that’s the point number one.

Point number two is if we want organizations to do this sort of thing I don’t think we can design them to do other things. I think there’s basically one mission per organization.

I know there are people who are advocating the internal reforms to corporations, such as putting employees or communities or even environmentalists on corporate boards. Personally I don’t think those would have the desired effect. I have been on boards where there are employee representatives, I’ve been on boards where I have been a minority director trying to espouse the interests of some of the underrepresented constituencies or stakeholders. And my experience is that, at the end of the day, it’s still the profit-maximizing algorithm that drives the corporations.

Alaska’s Permanent Fund is designed by the government to bring the gains on common investment back to the public. How would our society give over ownership of something like the sky to a trust?

This is nothing new, there are lots of examples. A land trust is a perfectly good example of an entity that has ownership of land or in some cases a conservation easement or development rights, which are partial ownership of the land. And the sky trust could have ownership of the emission permits. It would allow a certain amount of pollution, and it would decide this on its fiduciary obligation to future generations.

People would recognize that idea as a cap and trade scheme.

Yes. The cap and trade scheme is a good start towards the sky trust. It’s halfway there. The other half is that instead of giving emissions permits for free to polluters, which is a sort of privatization of the sky, we would hold those property rights in trust.

We would auction them to polluters, up to the safe limit, and there would be a revenue stream flowing to the trust based on auctioning this limited number of pollution permits. And that revenue would belong to everyone, because the trust would manage those funds on behalf of all citizens equally in the form of monetized common wealth.

These are large-scale changes, and you chart a bottom-up approach. But there would clearly be a top-down component, which you mention too. How might individuals with varying degrees of influence work toward some of these goals?

I think that the most important thing that we can do, regardless of age, is to just notice and point out to others how much common wealth there is. I think this is the big hindrance that we have, the fact that we do not realize how much common wealth is out there that belongs to everyone that needs to be managed properly.

And you have to start locally. If you want to get involved in protecting a piece of this common wealth, pick a piece you really care about. Maybe a stream near you, or set-up a little Wi-Fi system. One thing I noticed is that you get all these Wi-Fi signals, but they are password protected and encrypted. Why do we do that? Why don’t we share it?

With something like the environment, don’t we need a global approach? Do you see any prospects for how to globalize these things? Isn’t the United States already having problems promoting its economic system abroad?

The global implementation, I think, is some ways off. You have to be patient and realize that it does start locally, work its way up to the state, regional, and national level. And when there’s enough of a base that understands the issue, knows how it works, I think that’s when there’s an opportunity to take it global.

You did hit the nail on the head in terms of the U.S. The U.S. is, as you said, exporting our economic philosophy which, I believe, is the wrong economic philosophy. It’s based on privatization and endless growth, and excess production, things we don’t really need.

If the U.S. got its own house in order and began exporting a more appropriate economic philosophy and system, I think that would make a huge difference globally.

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