[OPE-L] The Next Stage of Capitalism?

From: glevy@PRATT.EDU
Date: Wed Jan 24 2007 - 12:23:56 EST

Perhaps this review of _Capitalism 3.0_ would be better titled
"The New Stage of Reformism"?  Can there be a generalized re-claiming
of The Commons when there's still capitalism?

In solidarity, Jerry

AlterNet: The Next Stage of Capitalism
<http://www.alternet.org/story/46146/?comments=view&cID=424590&pID=424177 The Next Stage of Capitalism

By David Morris, AlterNet. Posted January 5, 2007.

In his new book Capitalism 3.0, Peter Barnes writes that the costs of our
current capitalist system are clear: inequality, stressful lives and a
dwindling financial safety net. But how do we revise such a complex
Since the dawn of capitalism, people have been in awe of both its
productive and destructive capacities. Karl Marx and Friedrich Engels
expressed their own wonderment in a widely quoted passage from the
Communist Manifesto, published in 1848.

  "The bourgeoisie, during its rule of scarce one hundred years, has
created more massive and more colossal productive forces than have all
preceding generations together. Subjection of Nature's forces to man,
machinery, application of chemistry to industry and agriculture,
steam-navigation, railways, electric telegraphs, clearing of whole
continents for cultivation, canalization of rivers, whole populations
conjured out of the ground. What earlier century had even a presentiment
that such productive forces slumbered in the lap of social labor?"

Prodigious production, however, imposed an equally prodigious cost on
nature and humanity. And humanity did not go quietly into the dark
industrial night. So long as people could survive on the land, however
minimally, they rarely chose to become industrial laborers. As Karl
Polanyi explained in The Great Transformation, they became "Labor" because
they had to.

The driving force that made them have to was the enclosure movement.
English law and custom were reshaped to segregate and privatize land
formerly available to all for grazing and farming. With less and less
access to the Commons, impoverished peasants moved into the cities. Over
many decades, they became a reluctant and restive industrial workforce.

In his brilliant and so very needed new book Capitalism 3.0: A Guide to
Reclaiming the Commons, (Berrett-Koehler) Peter Barnes argues that each
stage of capitalism spawns its own operating system, its own set of rules
and institutions that reflect its historical situation. The enclosures
laws reflected a time of shortages and scarcity he calls Capitalism 1.0.

Beginning in the late 19th century and increasingly evident in the late
20th century, we have moved into a period Barnes calls Capitalism 2.0.
This era is characterized by surplus, not scarcity. The central economic
problem no longer is increasing supply, but soliciting new demand. An
increasing portion of the GDP is spent to persuade people to want
increasingly superfluous output and to provide them the credit to buy it.
Regulations curb corporate excesses; incentives ameliorate the damage
caused by those corporations.

Capitalism 2.0 spawns a political battle that focuses on how the enormous
wealth generated by capitalism's prodigious engines should be distributed.
That battle gives birth to a new set of rules and institutions, including
the regulation of corporate behavior, environmental regulations, and the
creation of a safety net(minimum wage and maximum hour laws, Social
Security, and universal health care -- everywhere but in the U.S.)

To Barnes, the costs of Capitalism 2.0 on humanity are clear: growing
inequality, increasingly stressful lives, ever-widening holes in the
safety net as capital spills across borders and corporate revenues and
power begin to exceed those of many nations.

We need a new set of operating instructions, Barnes argues, that will
usher in and guide the creation of Capitalism 3.0. In a remarkably brief
166 pages, Peter addresses and rather astonishingly, largely answers his
question, "How do you revise a system as vast and complex as capitalism?
And how do you do it gracefully, with a minimum of pain and disruption?"

Capitalism 3.0 grew out of a life of social and political activism and
market entrepreneurialism. In the 1970s, Barnes started a profitable solar
energy company. In the 1980s, he helped launch the much more profitable
and enduring Working Assets phone and financial company. He opens his book
with this self-description. "I'm a businessman. I believe society should
reward successful initiative with profit. At the same time, I know that
profit-seeking activities have unhealthy side effects. They cause
pollution, waste, inequality, anxiety and no small amount of confusion
about the purpose of life."

Barnes' key solution to the unhealthy side effects of profit-seeking
behavior is to revive the idea of -- and reclaim the value -- of the
Commons. Over the last few years, hundreds of meetings and thousands of
conversations have taken place among those who are actively involved in
protecting the popular culture from the encroachment of private
intellectual property, those who are involved in trying to maintain the
internet as a public network, and those who are trying to curb corporate
power and restrain the increasing tendency by cities and states to
privatize public goods.

Many of these conversations have been stimulated by a small
California-based organization called the Tomales Bay Institute, aided and
abetted by its increasingly well-visited web site. Among its fellows are
David Bollier, Harriet Barlow, Jonathan Rowe, and Peter Barnes. Capitalism
3.0 is the first comprehensive book on the Commons issued by the

The Commons, Barnes insists, should no longer be viewed simply as a
pasture where animals graze, but rather as a generic term, comparable to
the terms "market" or "state". The Commons is the gifts we inherit or
create together. "A gift is something we receive as oppose to something we
earn," Barnes writes. "A shared gift is one we receive as members of a
community as opposed to individually".

Think of the Commons as a broad river fed by three principal tributaries:
nature, community, and culture. This river precedes and surrounds
capitalism and adds immense value to it, and to us.

The land as Commons is an idea that has had its advocates from the
earliest days of the American Republic. For Thomas Paine, "there are two
kinds of property. Firstly, natural property, or that which comes to us
from the Creator of the universe -- such as the earth, air, water.
Secondly, artificial or acquired property -- the invention of men." In the
natural property, Paine maintained, "all individuals have legitimate
birthrights ... Since such birthrights were diminished by enclosure, there
ought to be an 'indemnification for that loss." Paine propose the
establishment of a national permanent fund where every person at the age
of twenty-one would receive money as partial compensation for his or her
loss of "natural inheritance, by the introduction of the system of landed

In the late 19th century, economist Henry George launched an influential
movement also based on the concept of the Commons. That movement argued
that the value of land is almost entirely derived, not from the
landowner's investment, but from public actions. Value comes from easy
transportation access, good parks and schools, quiet and safe streets. All
of which are created from public investment. George and his followers
advocated a significant tax on unimproved land, to compensate the public
for its investment that created that land's market valuable.

In the modern lingo, Henry George was the first to advocate an
anti-givings movement. In the last twenty years the United States has
witnessed the rise of its evil twin, the anti-takings movement. This
movement has gained considerable political traction. Several states have
adopted laws that require government to compensate private landowners if
public actions diminish the value of private property. If, for example,
government downzones land to require a lower building density, the
landowner should receive compensation for any loss in his property value.

But what if the government upzones the land to allow for higher
concentration? What if it builds a freeway near the land? What if it
transforms an unsightly section of the neighborhood into a park? All these
actions would substantially increase the value of the land. Shouldn't the
public be compensated for its investment? Even a cursory investigation
suggests that the level of givings in this country is 100, perhaps even
1000 times greater than the level of takings.

Barnes is reluctant to rely on governments to protect the Commons,
especially on an ongoing basis. Governments change. Laws, regulations, and
taxes are easily rescinded or weakened when powerful financial interests
get involved. The public interest rarely if ever is represented with the
same level of resources and feral energy as the private interest. This
imbalance is inherent in the costs and rewards of involvement. An
individual gains little by stopping private interests from encroaching on
the Commons. An individual corporation, on the other hand, is handsomely
rewarded when it enables poaching.

The timber industry spent $8 million in campaign contributions to preserve
a logging road subsidy worth $458 million, a return on their investment of
5,725 percent, former Republican strategist Kevin Phillips observes. Glaxo
Wellcome invested $1.2 million in campaign contributions to obtain a l9
month patent extension on Zantac worth $1 billion, a return of 83,333

Rather than relying on government, Barnes argues for the creation of a new
institution, a commons trust, based on a new property right in the
Commons. Unlike government policies, he maintains, property rights tend to
endure, as do the institutions that own them. When government is deciding
what to do with a public asset like the spectrum, or the national parks,
or the air, Barnes' advice is, "Propertize, don't privatize".

Barnes briefly lists many kinds of possible trusts: watershed trusts, air
trusts, children's opportunity trust, an American Permanent Fund based on
a waste absorption tax on corporate profits.

These new trusts would serve as stewards of the Commons for future
generations, and would distribute revenue gained from creating a property
right in the Commons. Barnes argues that a trust could conceivably
generate large sums, which, if distributed on a per capita basis, could
ameliorate poverty. Not only would there be a redistribution from rich to
poor within countries, but an even larger redistribution between richer
and poorer countries when the Commons in question is global, like the

A significant test for this new approach to the Commons may come as we
develop strategies to combat global warming. Europe and, several American
states, are beginning to embrace a cap on carbon emissions, ratcheting the
cap down over time to eventually reach a point where no further global
warming from human activities would occur.

Such a cap creates an environmental market value for carbon. How should
this new value be distributed? Europe distributed carbon emission credits
in proportion to the amount of pollution a company emitted! The result?
Billions of dollars in increased corporate income with little or no
reduction in pollution. The new Governor of New York, Eliot Spitzer, has
suggested that 100 percent of the credits created by a New York carbon cap
on electricity generation should be auctioned off.

Barnes would consider this a major step in the right direction, but he
would go further. In Capitalism 3.0, and in his previous book, Who Owns
the Sky? Barnes argues that carbon emission credits should be distributed
on a per capita basis. We might issue a certificate to every person that
allows him or her 5 tons of annual carbon emissions.

Corporations, and households that generate higher carbon emissions would
have to buy credits. Each five years, as governments ratchet downwards the
carbon cap, increasing the market value of an individual credit rises,
creating a higher incentive for companies to improve energy efficiency and
shift to no and low carbon energy sources and a greater income to
individual households.

Capitalism 3.0 is an important and timely book. Blessedly brief and simply
written, it elaborates an argument for profound social and economic change
while offering a pragmatic strategy for achieving that change with a
minimal amount of disruption and bureaucracy. Read it to understand why
the word Commons is slowly but surely permeating political conversations.

Tagged as: capitalism, peter barnes, commons, carbon

David Morris is co-founder and vice president of the Institute for Local
Self Reliance in Minneapolis, Minnnesota and director of its New Rules

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