Capitalism 3.0: a guide to reclaiming the commons
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.
I’m also a liberal, in the sense that I’m not averse to a role for
government in society. Yet history has convinced me that representative
government can’t adequately protect the interests of ordinary
citizens. Even less can it protect the interests of future generations,
ecosystems, and nonhuman species. The reason is that most—though
not all—of the time, government puts the interests of private corporations
first. This is a systemic problem of a capitalist democracy, not
just a matter of electing new leaders.
I’d been much affected by the writings of British economist
E. F. Schumacher. In his 1973 book Small Is Beautiful, Schumacher
argued that capitalism is dangerously out of sync with both nature
and the human psyche. As an alternative, he envisioned an economy
of small-scale enterprises, often employee-owned, using clean
technologies.
When capitalism started, nature was abundant and capital was
scarce; it thus made sense to reward capital above all else. Today we’re
awash in capital and literally running out of nature. We’re also losing
many social arrangements that bind us together as communities and
enrich our lives in nonmonetary ways. This doesn’t mean capitalism
is doomed or useless, but it does mean we have to modify it. We
have to adapt it to the twenty-first century rather than the eighteenth.
And that can be done.
The Decline of the Commons
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 heirs—typically, 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.
In the seventeenth century, John Locke sought to balance the
commons and private property. Like others of his era, he saw that
private property doesn’t exist in a vacuum; it exists in relationship to
a commons, vis-à-vis which there are takings and leavings. The
rationale for private property is that it boosts economic production,
but the commons has a rationale, too: it provides sustenance for all.
Both sides must be respected.
Locke believed that God gave the earth to “mankind in common,”
but that private property is justified because it spurs humans
to work. Whenever a person mixes his labor with nature, he “joins to
it something that is his own, and thereby makes it his property.” But
here Locke added an important proviso: “For this labor being the
unquestionable property of the laborer,” he wrote, “no man but he
can have a right to what that is once joined to, at least where there is
enough, and as good, left in common for others.” In other words, a
person can acquire property, but there’s a limit to how much he or
she can rightfully appropriate. That limit is set by two considerations:
first, it should be no more than he can join his labor to, and
second, it has to leave “enough and as good” in common for others.
This was consistent with English common law at the time, which
held, for example, that a riparian landowner could withdraw water
for his own use, but couldn’t diminish the supply available to others.
Despite Locke’s quest for balance, the English commons didn’t
last. In the eighteenth and nineteenth centuries, the movement to
enclose and privatize it accelerated greatly. According to historian
Karl Polanyi, this enclosure was the great transformation that
launched the modern era. Local gentry, backed by Parliament, fenced
off village lands and converted them to private holdings. Impoverished
peasants then drifted to cities and became industrial workers.
Landlords invested their agricultural profits in manufacturing, and
modern times, economically speaking, began.
One observer of this transformation was Thomas Paine, America’s
pro-independence pamphleteer. Seeing how enclosure of the
commons benefited a few and disinherited many others, Paine proposed
a remedy—not a reversal of enclosure, which he considered
necessary for economic reasons, but compensation for it.
Like Locke, Paine believed nature was a gift of God to all.
“There are two kinds of property,” he wrote. “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 latter, he went on, equality is
impossible, but in the former, “all individuals have legitimate
birthrights.” Since such birthrights were diminished by enclosure,
there ought to be an “indemnification for that loss.”
Paine therefore proposed a “national fund” that would do two
things:
[Pay] to every person, when arrived at the age of twenty-one
years, the sum of fifteen pounds sterling, as a compensation
in part, for the loss of his or her natural inheritance, by the
introduction of the system of landed property: And also, the
sum of ten pounds per annum, during life, to every person
now living, of the age of fifty years, and to all others as they
shall arrive at that age.
A century and a half later, America created a national fund to
do part of what Paine recommended—we call it Social Security.
We’ve yet to adopt the other part, but its basic principle—that
enclosure of a commons requires compensation—is as sound in our
time as it was in Paine’s.
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Peter Barnes is an innovative thinker and entrepreneur whose work has focused on fixing the deep flaws of capitalism. He has written numerous books and articles, co-founded several socially responsible businesses (including Working Assets/Credo ), and started a retreat for progressive thinkers and writers ( The Mesa Refuge ).
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