Prosperity

Why Common Ownership Is a Route to Social Transformation

The case for despair is made. Now let’s start to get out of the mess we’re in.

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By George Monbiot

With one breath, the friends of power told us that global capitalism was a dynamic, disruptive force, the source of constant innovation and change. With the next, they told us it had brought about the end of history: permanent stability and peace. There was no attempt to resolve this contradiction. Or any other.

We were promised unending growth on a finite planet. We were told that a vastly unequal system would remove all differences. Social peace would be delivered by a system based on competition and envy. Democracy would be secured by the power of money. The contradictions were crashingly obvious. The whole package relied on magic.

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Because none of it works, there is no normal to which to return. The Keynesian measures espoused by Jeremy Corbyn and Bernie Sanders – in a world crashing into environmental limits and the mass destruction of jobs – are as irrelevant in the 21st Century as the neoliberal prescriptions that caused the financial crisis.

In his brilliant, incendiary new book Age of Anger, Pankaj Mishra explains the current crises as new manifestations of one long disruption, that has been ripping up society for 200 years or more. Our sanitised histories of Europe and America allow us to forget that bedlam and carnage, civil and international war, colonialism and overseas slaughter, racism and genocide were norms of this period, not exceptions.

Now the rest of the world is confronting the same disruptive forces, as industrial capitalism is globalised. It destroys old forms of authority while promising universal freedom, autonomy and prosperity. Those promises collide with massive disparities of power, status and property ownership. The result is the global spread of the 19th-century European diseases of humiliation, envy and a sense of impotence. Frustrated expectations, rage and self-disgust have driven support for movements as diverse as Isis, resurgent Hindu nationalism and stomping demagoguery in Britain, the US, France and Hungary.

How do we respond to these crises? Raymond Williams said “to be truly radical is to make hope possible, rather than despair convincing”. I know I have made despair pretty convincing over the past few weeks. So this column is the first in an occasional series whose purpose is to champion new approaches to politics, economics and social change. There is no going back, no comfort in old certainties. We must rethink the world from first principles.

There are many points at which I could begin, but it seems to me that an obvious one is this. The market alone cannot meet our needs, nor can the state. Both, by rooting out attachment, help fuel the alienation, rage and anomie that breeds extremism. Over the past 200 years, one element has been conspicuously absent from the dominant ideologies, something that is neither market nor state: the commons.

A commons is an asset over which a community has shared and equal rights. This could, in principle, include land, water, minerals, knowledge, scientific research and software. But at the moment most of these assets have been enclosed: seized by either the state or private interests and treated as any other form of capital. Through this enclosure, we have been deprived of our common wealth.

Some commons still exist. They range from community-owned forests in Nepal and Romania to lobster fisheries in Maine, pastures in East Africa and Switzerland, the Internet, Wikipedia, Linux, journals published by the Public Library of Science, the timebank in Helsinki, local currencies and open-source microscopy. But these are exceptions to the general rule of private and exclusive ownership.

In his book Land, the community organiser Martin Adams urges us to see the land as something that once belonged to everyone and no one, yet has been acquired by a minority, that excludes other people from its enjoyment. He proposes that those who use the land exclusively should pay a “community land contribution” as compensation. This could partly replace income and sales tax, prevent land hoarding and bring down land prices. The revenue could help to fund a universal basic income. Eventually we might move to a system in which land is owned by the local community and leased to those who use it.

Similar principles could apply to energy. The right to produce carbon by burning fossil fuels could be auctioned (a smaller pool would be available every year). The proceeds could fund public services and a transition to clean energy. Those who wish to use the wind or sunlight to generate power should be asked to pay a community contribution. Or the generators could be owned by communities – there are already plenty of examples.

Rather than allowing corporations to use intellectual property rights to create an artificial scarcity of knowledge, or (like Google and Facebook) to capture the value generated by other people, we could move towards a “social knowledge economy” of the kind promoted by the government of Ecuador. A share of profits could (with the help of blockchain technology) be exchanged for helping to build online platforms and providing the content they host.

The restoration of the commons has great potential not only to distribute wealth but also to change society. As the writer David Bollier points out, a commons is not just a resource (land or trees or software) but also the community of people managing and protecting it. The members of the commons develop much deeper connections with each other and their assets than we do as passive consumers of corporate products.

Managing common resources means developing rules, values and traditions. It means, in some cases, re-embedding ourselves in the places in which we live. It means reshaping government to meet the needs of communities, not corporations. In other words, reviving the commons can act as a counterweight to the atomising, alienating forces now generating a thousand forms of toxic reaction.

This is not the whole answer. My hope is that, after exploring a wide range of potential solutions, with the help of your comments and suggestions I can start to develop a synthesis: a new political, economic and social story, that might be matched to the demands of the 21st Century. Realising it is a further challenge, on which we also need to work. But first we must decide what we want. Then we decide how to get it.

Originally published at the Guardian here.

2017 March 11


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  • Dick Burkhart

    Your concept is quite familiar to me. I call it “universal ownership” of the “means of production” or of wealth generating assets. I’d start with all billion dollar corporations and government owned assets, such as land, forests, fisheries, fossil fuels, minerals, etc. For each such asset, develop a “stakeholder ownership” plan, including at least half going directly to all citizens as shares which yield monthly dividend deposits (read “Liberty and Dividends for All” by Peter Barnes). Other owners would include those typical of cooperatives: employees, customers, suppliers, etc.. In addition different levels of government, from local to global, would always have some ownership, with perhaps a little private ownership left for things like pension funds, but with strict limits on individual or family ownership.

    Combine this with a highly progressive tax system, targetting both wealth and income, and we could abolish rich people, along with the concentration of wealth and power. I’d encourage entreprneurship with small enterprises, with the successful ones automatically being transformed over a period of time to stakeholder ownership by an international agency once they get to a specified size.

    • cstahnke

      This cannot happen–the “progressive” era is gone never to return. Congress is owned by large corporations and their allies in the National Security State (aka Deep State). This is like encouraging a gang-leader to part with his money–ain’t going to happen. Most large corporations are criminal conspiracies and will do ANYTHING legal or illegal to stop you from taking even a penny of their money or the equivalent in power. Multi-national corporations are monsters and can only be sabotaged or worked around. It’s in the work-arounds that we can begin to tame these monsters and begin to use the virtues and technology they provide (and maybe the even more powerful technologies they repress).

    • Hanuman

      Dick Burkhart, your interpretation of the article is too heavily influenced by modern liberal/progressive paradigms of economic justice. These ideas, socialism being the most easy to imagine, tax earned income (labor) and do not tax, or woefully undertax unearned income, what classical economists identified as rent. You probably have come across these ideas of rent seeking in your reading, but perhaps haven’t integrated them into your daily thinking.

      Rent seeking can take many forms. The most obvious is thru land. Before the latter part of the middle ages, peasants worked the land, called the commons, and gave a portion to the lords. They were more or less in control of their own means of production.

      In the late middle ages-I think the Tudor period, when England began to trade wool internationally, the peasants were thrown off the commons. This produced the world’s first homeless and unemployed social class.

      The landlords raised sheep on what was once public land, sold the wool, and accumulated wealth. The farming continued as well, on less fertile land no doubt, and the lords continued to earn money without doing any actual work themselves. The take-away here is that like today, it pays to choose your parents wisely.

      The means of production was firmly not in the hands of those doing the work.

      Centuries passed, and gradually manufacturing increased its efficiency. Our land owning lords found themselves in competition with the burgeoning manufacturers for labor. The lawmakers were on the side of the historical holders of power, and created poor laws to help the landlords payment of wages to farmers. The called it outside relief (as opposed to the poorhouses of later years-think Dickens). These poor laws were a wage supplement and kept the landowners’ wages at an artificial parity with the new manufacturers. Couple this with tariffs that kept cheaper grain imports out and food prices higher than they would be otherwise, and you have a situation where the “means of production” was still in the hands of the landlords, and not in the hands of the common people.

      When England ended relief for the poor and repealed the corn laws, they entered a period of brutal, sadistic capitalism that we find in Dickens. Certainly the means of production were not in the hands of the common people, and like today, choices for survival included work for almost nothing, basically almost nothing, and nothing at all.

      Unearned income, whether as a landlord, manufacturer, money lender, etc. payed handsomely. This is the class that today rules planet earth.

      The most important step to correct for this imbalance is to tax away the enormous unearned wealth that rentiers make. This comes in the form of land, minerals, patents that create monopoly, monopolies and cartels, and so on. Anti-trust laws need to be enforced again.

      The American New Dealers understood anti-trust and free competition. They understood that rent seeking and monopoly were the enemies of free enterprise. Tax these things, while keeping taxes on labor (earned income) as close to zero as possible.

      The commons should be the property of the people, not a corrupt government in service to its elite clients nor should it be the property of the elites themselves. They enjoy a free lunch at our expense, and their bought media and impotent educational system portray the problem as one where the little man is trying to freeload.

      Try to separate earned from unearned income and trace the roots of the title of ownership to the sources of unearned income. It all leads back to aristocracy and war.

      In the age of the internet, we can educate ourselves and do better.

  • Bruno Cotrim

    I agree with the problems spoken in this article, specially the case for the lack of jobs. In the end the social crisys spoken by the author will come from the lack of jobs that causes starvation and inequality, that causes guilt and resentment.

    I’m not sure how the author really sees the labor market, for as much as I read and think, I can’t see the automation creating as much or more jobs than it destroys. I just can’t agree with people that say it will be like computerization, in my opinion it is just wishful thinking.

    Independently of the future, a question I see no where asked is, do we want more jobs? why? Surely it is not because most of the world population wishes to spend most of their lives doing tasks they hate.

    In my view the most important change needed is in how we look at work and eventually property.

    The current insidious view of Humans as Homo-ecunomicus, that hate to effort themselves and only do so if they are rewarded is dangerous. One has only to watch someone play any game to see that it is not true, most games require much more effort than normal day to day work. The same level of effort is visible on any task that engages the performer’s interest independently of reward.

    Why do most people have to spend all their lives doing work they hate and having the technology to end it must be a problem?

    • cstahnke

      One of the most critical crises we face is how do we revive Western thinking about the issues before us. We live in a post-rational society where any rational solution to any problem is discounted and is always DOA. Why? Because we regard money, wealth and status as the highest moral good but seldom admit to it. Science shows us how we learn and what motivates human beings which is along the lines you describe–but those that rule society maintain a mythology of the fake science of “economics” (there is no such thing there is only “political-economy”) and the belief that we are chiefly motivated by economic factors–we’re not and social science has shown that over and over again.

      Indeed–why should people work at jobs they hate? As Church Lady would say….Satan? And she would be right in a way. Much of this problem lies in the failure of American intellectuals to think because they are too busy being bureaucrats and are infected with bizarre faux Marxist and post-modernist theories that are so deeply embedded in the politics of Academia there is no hope for that sector.

  • Rahul Basu

    I’m part of the Goenchi Mati Movement (goenchimati.org), based in Goa, India. We are working on a slightly different way of looking at extractives, essentially taking the perspective of owners of sub-soil assets. Quite simply, we are asking for the following principles to be implemented (in Goa and globally):

    1. We, the people of Goa, own the minerals in common. The state government is merely a trustee of natural resources for the people and especially future generations (Public Trust Doctrine).
    2. As we have inherited the minerals, we are simply custodians and must pass them on to future generations (Intergenerational Equity Principle).
    3. Therefore, if we mine and we sell our mineral resources, we must ensure zero loss, ie. capture of the full economic rent (sale price minus cost of extraction, cost including reasonable profit for miner). Any loss is a loss to all of us and our future generations.
    4. All the money received from our minerals must be saved in a Permanent Fund, as already implemented all over the globe. Like the minerals, the Permanent Fund will also be part of the commons. The Supreme Court of India has ordered the creation of a Permanent Fund for Goan iron ore and already $13 million is deposited.
    5. Any real income (after inflation) from the Permanent Fund must only be distributed equally to all as a right of ownership, a Citizen’s Dividend.

    This should be the default situation for minerals (and the commons generally). It is palpably fair, ethical, right, just and moral. It seems to be a legally valid argument (in India at least). It follows economic theory. It is valid from an accounting standpoint. It is customary treatment for personal inheritances (in India at least).

    Further, deviations have steep thresholds to cross. Any losses (principle 3) are permanent. It raises the question of whether it would be better to wait for better institution. Since minerals & the permanent fund are part of the commons, any diversion to the budget (principles 4 & 5) is nothing but a per head tax (or a negative universal basic income) – something that cannot be legislated in a democracy. Diversion to the budget also provides easy money to the politicians (assuming the Permanent Fund is insulated), which would worsen governance.

    We found that in Goa, we were receiving less than 5% of the economic rent over a 8 year period (2004-2012). The loss was 28% of cumulative GDP, about 2 times the cumulative state budget, and on a household basis, greater than the average private assets per household.

    Data indicates a similar situation across India, across minerals, and across the planet. Losses soared during the China boom. IMF estimates that at best, countries lose around 15-35% of their petroluem value and 35-55% of their value in hard minerals (Fiscal Regimes for Extractive Industries: Design and Implementation, para 64).

    This is a large driver of crony capitalism globally. Further, the absurd terms of contract incentivises rapid extraction & exit. This in turn incentivises human rights violations, environmental damage, conflict and war. Separately, this also underprices the minerals, leading to over consumption.

    This is also a huge driver of inequality – money is being taken equally from everyone, and a few are becoming rich. This is looting economics. After the loot will come the dribbles from the rich.

    The amounts at stake are enormous. $27 tn was extracted between 1970 and 2013 (World Bank). If we assume a 50% loss on average, this is a loss of $13.5 tn, or equalised, $2,000 per person globally.

    A large part of the mining money actually received by governments are treated as “windfall revenue”, not the “sale of common inherited assets”, and were spent. Due to the commodity cycle, this creates huge volatility in government budgets. “Revenue” booms. Expenditure rises to keep pace. Prices crash. “Revenues” crash. Sell more inherited wealth? Prices drop further. Hard choices to make.

    Alaska, which only deposits 25% of its oil money, has suffered from the price volatility impact, as you can see from their ongoing budget discussions. So too Saudi Arabia, Venezuela and Russia. Some countries like Norway have a fiscal policy that effectively considers minerals to be capital – they target the non-mineral revenue deficit, and deposit 100% of mineral receipts into their Permanent Fund. This avoids this issue.

    On the flip side, our structure has some positives. The Citizen’s Dividend links the citizen to their minerals and the Permanent Fund. Focus on loss in rent will ensure that the terms of the extraction contracts are fair for the owners, but not exorbitant. The Citizen’s Dividend creates incentives and capability for public monitoring of the contract terms as well as violations. This changes incentives for the miners – lower human rights and environmental law violations. The whole system is fair, likely reducing many mineral conflicts (though Scotland is more likely to separate from the UK, etc). Since the state doesn’t benefit from the mining “revenue”, either at the point of extraction or the distribution of real income, there is little incentive to extract.

    Deeper implications are many. Rent losses are a huge driver of inequality (everyone loses equally, a few miners & their politician cronies benefit). The Citizen’s Dividend is also a Universal Basic Income, reducing poverty, and promoting equality / community. The environment is protected in multiple ways – lower incentive to extract, higher prices for minerals (acting like a carbon tax), etc. It reduces conflict.

    There are obvious connections & overlaps with the work on the commons, as well as the tax + dividend structures. We feel that starting with minerals is important as energy alone is the single biggest sector of the global economy, and valuation of minerals is long understood (compared to forests, biodiversity, etc). If these principles can successfully be implemented for minerals, then extensions will be easy.

    From an economic theory perspective, all we are asking for is respect for property rights. This is how any reasonable person should treat their inheritances, and we are simply generalising it to the commons. This is unarguable in all flavous of mainstream economics (although indigenous people & others will argue that nature cannot be owned).

    The Goenchi Mati Movement in Goa, which is advocating for the full implementation of our 5 principles. The Government of India has discussed our idea in the recent Economic Survey, and CGDEV reported on it. In our recent state elections, 4 political parties endorsed our manifesto, including Aam Aadmi Party (a good governance / anti corruption party that swept the Delhi elections). The Shadow Chancellor of the UK is also interested in our ideas. Do read our manifesto (goenchimati.org/manifesto), it lays out how these principles can be implemented in Goa.

    Goa Foundation (goafoundation.org), an environmental non-profit that is involved, among other things, in litigation against mining in Goa, and supports the Goenchi Mati Movement. The Supreme Court order on the Permanent Fund is a result of Goa Foundation’s work.

    We are also conscious that these principles are universal, and we would like to implement them globally. Our global initiative is The Future We Need (www.facebook.com/thefutureweneed). Do join us.

  • cstahnke

    What you are arguing for is a rational approach to human affairs. You are asking the question of how can we best provide for human happiness using reason. Sadly, we are too late. We live in a post-rational era where reason, learning, and even compassion is being substituted by fantasy and virtual reality and virtual “feelings.” I don’t know if this is true in the UK but it is absolutely true in the USA and it isn’t just something that is contained on the “right” (there is no real right or left at the moment–the distinctions no longer work). All levels of American society are engulfed in massive delusions about almost everything imaginable for a whole variety of reasons. Naturally, this is a very unstable situation which will resolve itself at some point.

    I’ve seen so many rational approaches to common problems from basic Big Picture ideas to technical ideas and I’m convinced we have more than the know-how to solve any of the collective problems we face fairly easily and quickly (except Climate Change which is more difficult). There are hundreds of road-maps all workable I’ve seen over the years and none of them can be tried unless oligarchs decide they can be tried–there is no other structural way at this time to create a society that benefits society. We’ll have to wait. The sad part, is that intellectual culture in the USA is dead and a new intellectual culture is growing up online where real ideas and solutions can be talked about, spread and considered. Where this leads, I don’t know but it is the only hope we have from a cultural perspective. So articles like this are useful for the resurrection of “the Great Conversation” that was so rudely interrupted decades ago.