Barnes' idea is that we need to use a 3rd institution - "the commons" - to develop a better form a capitalism that takes into account natural resources that are used and not accounted for. This is needed, because government has failed to do a good job in this regard and is subject by capture by industry, something that is very prevalent in the USA. The commons works by being above the short term exigencies of businessmen and politicians, using the power of property rights under legal trusteeship to ensure that the commons under trust are best used for the long term.

So far so good. Then we appear to run into real issues that are glossed over pretty lightly.

The commons works best where the commons boundary, like any property, can be clearly demarcated and the inputs and outputs tallied. Parks and historic buildings come to mind. But the real commons we are after include the air, the oceans and the larger terrestrial land masses. And this is where the commons system may break down. Why? Barnes wants to make the commons sustainable by offering stakeholders an income based on use. If a factory owner wants to emit CO2, he must pay the commons for that right and the commons disburses some of the fees to the stakeholders. But consider another common, the oceans. The stakeholders might reasonably ask the air commons for fees for their right to add CO2 to the oceans, increasing their acidity, or raising their temperature, or destroying Arctic ice cover. How would that be valued, where are the boundaries drawn? This seems to lead us back to the morass from whence we came, allowing markets to determine this, and possibly back to private ownership.

As far as I can see, this is only going to be managed by global decisions and global ownership of the commons, something that I see as very hard to accomplish, given the huge differences in goals of the global stakeholders.

Another goal of the commons structure that Barnes sees as desirable is the redistribution of income through stakeholder ownership, rather than by taxation. I agree this is a good goal, but I disagree the commons is the best way to solve this. Other countries have solved this at least partly through policies and taxes. Even in the US, we still have publicly funded schools, and publicly funded senior health care. That was achieved historically and has resisted attempts to dismantle it, although both are on shakier ground today than they were.

Overall, I think that the central idea is an interesting one, worthy of more discussion and implementation, at least in the simpler, smaller domains. For that reason alone, this book is worth reading.

October 09, 2008

Best blueprint I've seen for restoring sanity to capitalism.

Barnes does a terrific job laying out a blueprint for dealing with the amazingly complex system we call capitalism today, a plan for curing many of the dysfunctions driving us into an imperilled future. I love the special sections addressing all the players at the end. Now we need to rebuild the system so it sustains human live for future generations. We have the framework thanks to Barnes. Now we must build the finished product...like volunteers for Habitat for Humanity it is time for all of us to pick up a tool and get work, wherever we are, whatever we are doing.

My own work deals with shifting the paradigm from which we think. But structures still need to change so they are aligned with the new consciousness. This book is a great start.

Thank you, Peter Barnes!!

John Renesch, author, Getting to the Better Future
April 06, 2008

Broadening the Ownership of Capital

"Capitalism 2.0" names the problem that needs solving: our economic system that relies on increasing consumption. It is destroying nature, widening the gap between the few very rich and the many very poor, and failing to increase our happiness. Peter shows that the solution will not come from government, because it is controlled by the persons causing the problem. Corporate shareowners are also dismissed as a source of change.

The book's subtitle is "A Guide to Reclaiming the Commons." The "commons" means all the tangible or intangible "things" that do not belong to an individual, a corporation or other private entity. The commons belong equally to all individuals, including future generations. Over the centuries, many things that once were in the commons have been taken as private property or used for private purposes. The rest of us lose when a part of the commons is taken, such as with land and the airwaves. We also lose when the commons are used for private purposes, such as the use of air and water to dispose of waste.

What his book proposes, the "Capitalism 3.0" of its title, is that individual trusts be created to hold each element of the commons. The trustees would not only protect the trust property for future generations but they would also collect fees for its use and distribute them as dividends to all U.S. residents. The aggregate of the distributions from all these trusts could be enough to bring everyone above the poverty level.

I believe there is a missed opportunity in Peter's argument against a solution coming from shareowner action. He shows that existing shareowners routinely vote with management. What is missing is how that ownership structure could be changed, especially for younger businesses that are most likely to seek profitable new ways to solve social issues. Our own work is in broadening the ownership of business and in building a more direct relationship between the owners and their stewards in management. Peter places capitalism and community in conflict. He suggests the trusts of commons as a way to serve the community, leaving capitalism to service individual acquisition and consumption. We believe that businesses can market their ownership to their own communities, resulting in both service to the community and an investment return to the individual shareowners.

Capitalism 3.0 is a clear, well-thought-out analysis of the problems and a plan for protecting our world and society for future generations, while alleviating poverty.
Drawing upon John Rawls A Theory of Justice, Peter proposes the "predistribution of property," to provide more people with a source of income, rather than the redistribution of income that is practiced through taxation and welfare. However, predistributing assets into trusts means interposing an elite class to take care of the rest of us. The trustees would manage the commons, for the benefit of humans and other creatures now and for all time to come. Those of us being protected would have no direct participation in making policy or running the operations.

March 20, 2008

Good ideas, poorly written

There are some great ideas in this book and it is highly educational. However it seems like it could have really used a solid editor. First off, the running metaphor of capitalism and operating systems is just plain dumb, maybe it's because I am a software guy, but I just find it distracting. It lowers the authors cred.

Another gripe is that the book doesn't linearly develop an argument. It moves from high level 'wouldn't it be great ifs' to details and then back and forth repeatedly.

Sigh...
December 08, 2007

Putting a vital ingredient to sustainability squarely on the map

This book is an eye opener. the author does an excellent job at highlighting how the inherent limitations of both capitalist business and democratic multi-party governments in their current forms urgently need to be complemented by trusts that are constituted to have a long term mandate to protect ecological and community health as seed capital.

I agree that there are many complementary aspects such as ecological economics but feel that this book helps create a broader understanding of why trusts play such a vital role in moving beyond the dangers of centralized government and centralized big business.

A reviewer who claims that this book proposes any form of socialism seems to miss the point. Trusts are partially needed to prevent governments from taking short term populist decisions or over simplifying the quest for sustainability. Exactly because the author does not want to compromise the roles of business and government the author suggests trusts as a complementary force. If he was not a successful and convinced supporter of the free market he would reach different conclusions.

November 06, 2007

SIMILAR PRODUCTS

Deep Economy: The Wealth of Communities and the Durable Future
by Bill McKibben

Blessed Unrest: How the Largest Social Movement in History Is Restoring Grace, Justice, and Beauty to the World
by Paul Hawken

Silent Theft: The Private Plunder of Our Common Wealth
by David Bollier

Ecological Economics: Principles And Applications
by Herman E. Daly, Joshua Farley

Priceless: On Knowing the Price of Everything and the Value of Nothing
by Frank Ackerman, Lisa Heinzerling