Review of the Book:
Capitalism 3.0: A Guide to Reclaiming the Commons
by Peter Barnes
H. William Batt
[This book is published by Berrett-Koehler, 2006. This review
is reprinted from
GroundSwell, January-February 2007]
Peter Barnes, Co-Founder of Working Assets in 1982, has moved on
to offer his most recent idea to rescue an economic system run amok,
this titled Capitalism 3.0: A Guide to Reclaiming the Commons. The
same author, writing Who Owns the Sky some five years ago, suggested
the creation of a skyowners trust as a way to address
the problem of greenhouse gas emissions and a curb on
carbon-generating global warming.
Now his concern is much deeper, and addresses a capitalist
economic design which he believes needs a radical restructuring.
Using the metaphor of a computer operating system, Capitalism 3.0
suggests how our economy can be upgraded to insure its healthy and
responsible functioning. Capitalism 2.0 he demarcates as beginning
in the 1950s with the ascendancy and dominance of corporations. No
longer is it possible for shareholders to hold corporate structures
responsible for their actions, nor can government meet the challenge
either. Still another system of countervailing power must be devised
to hold them in check against their own inherent rapaciousness. This
new set of institutions, he believes, can rise from the growing
design of trusts, as these organizations can be the guardians of
what has historically been called the Commons. It is,
after all, the commons that is most threatened by commodification
and privatization. The elements of the Commons are not only nature,
but also community and culture, and enumerated in detail at
www.onthecommons.org.
There are ample instances of trust designs; they are found in
every economic sector the only requirement for their creation
is that it must have something with a marketable price. Moreover
they can be at all economic and political levels, local, regional,
and national. Among the examples offered at the local level are land
trusts first of all, but also community gardens, municipal Wi-Fi,
farmers markets, public spaces, car-free zones, and time
banks. At the regional level one can sometimes find trusts for
watersheds, air-sheds, and even fauna and flora habitats. The
following have been conceived and sometimes implemented at the
national level: the Alaska permanent fund, health insurance
programs, royalty funds, spectrum trusts and credit programs.
What all these designs have is common ownership of an asset or
service, one which can constitute a monopoly in a given area or
market. This allows the rent that flows from its service to be held
in such a way that it can be employed for a social good. Barnes
view is that the growth in the volume and strength of these entities
can operate such that they will counter the overwhelming dominance
of corporate power presently holding free market economies hostage.
The essence of corporations is their single inexorable mission to
secure returns for their stockholders and yet with limited
liability. A trust, in contrast, would be able to take a broader
view of any element within its purview, even though it sacrifices
private returns to memberowners. In one of his several graphic
depictions of this arrangement, trusts are placed on one side of a
see-saw and corporations on the other.
Government as much as private enterprise, he avows, is limited in
its capacity to address the social good. Governments are necessarily
responsive to the most focused interests of its constituencies; they
fail to protect broader and long term needs. To this reviewer, his
willingness to give up on the capacity of government is a weakness
of the book, but it no doubt stems from his first hand attempts to
deal with governments in several past ventures. It is difficult,
therefore, for me to argue he is wrong. Other solutions abound in
current debate public financing of elections, term limits,
better disposition of media resources, are among the most commonly
mentioned. But concentrations of power have always been a subject of
challenge; the founding fathers of this nation sought to address the
problem by employing a federal system of governments along with
checks and balances at each level. Peter Barnes sees a need for
further fracturing of institutional structures as a way to protect
at least some elements of the traditional commons that are now
threatened. American society is a very different system than it was
more than two centuries ago.
Creating trusts entails commodification of common attributes in
what he labels propertization. Propertizing the Commons,
just as with private sector elements, allows it to be better
protected in law and for more open markets to obtain. But Commons
are propertized without being privatized. The privatization of many
aspects of what have historically been common assets has allowed
rent to flow to those so fortunately situated to attain it.
Propertizing Commons guarantees that rents will remain shared, but
it still can put many parties at an economic disadvantage. Entry
barriers to enjoying the goods and services of commons may be lower,
but those that have the means to privatize such markets are still
advantaged. Society remains unequal, and essentially unjust, insofar
as such a two-tier system prevails. Its better perhaps than
the winner-take-all economy emerging at the moment, but it is hardly
a guarantee of equal birthrights of land to everyone.
One can argue that capturing rents for the use of selected
clienteles is certainly a step in the direction of restoring
elements of the Commons. Designs such as these are what
characterized the historic Georgist communities such as Arden,
Delaware and Fairhope, Alabama. Are the schemes that Barnes proposes
then any less Georgist? Some readers among the Georgist community
deny that Barnes is a Georgist, and regard his proposals as moving
farther away from a Georgist society. Insofar as rents are only
selectively recouped and for selected populations, they divide
people into selected Commons. How different are these from private
marinas owned as cooperatives or country clubs owned by members?
Professor Fred Foldvary, a widely read Georgist scholar, holds ideas
about government and communities not much different.
In January, I was fortunate in being able to question Peter Barnes
about the extent of his commitment to a Georgist utopia, however far
removed from current reality one might sense it to be. He was very
reassuring. The book itself pays homage to George in more than one
spot, and in both a personal avowal and in signing my copy In
honor of Henry George, he confirmed his view that the ideas
expressed in this book were not his final statement. Rather, they
should be viewed as a means within current reach, a partial solution
to what is a pervasive and daunting threat to the contemporary
American polity. Given his druthers, it would appear that he too
would prefer to see an across-the-board recovery of rents for the
provision of public goods and services. But that isnt within
reasonable reach at present. Meanwhile the polity is in need of
imminent if not drastic surgery.
So as land trusts, community gardens, spectrum rent auctions, and
perhaps other public commodities continue slowly to gain legitimacy,
the economy and the polity will continue to diversify in ways that
may be closer to Peter Barnes vision than to that of Henry
George. Nonetheless, Capitalism 3.0 brings within the scope of
discourse the prospect of a Capitalism 4.0 that at some point might
have an even stronger Georgist tone.