Capitalism 3.0: Chapter 10
What You Can Do
Two roads diverged in a wood, and I—I took the one less traveled by, And that has made all the difference.
—Robert Frost, 1920
We come at last to the inescapable question: What can each of us do to help build Capitalism 3.0?
Earlier, I noted that corporations dominate American government most, but not all, of the time. Once or twice per century, there are brief openings during which noncorporate forces reign. No one can say when the next such opening will occur, but it’s safe to say that it will. We must be ready when it comes to build a strong, self-perpetuating commons sector, not easily dismantled when the political wheel turns again.
Being ready then means getting busy now. We should, first of all, start noticing and talking about our common wealth. Whenever we see it, we should point to it and let the world know to whom it belongs.
Second, we should demand more birthrights and property rights than we have now. Rights that belong to everyone. Rights built into our operating system. Rights that protect future generations as well as our own.
The reason I stress property rights is that, in America, property rights are sacred. They’re guaranteed by the Constitution. Once you have them, they can’t be taken without fair compensation. These protections have greatly benefited those who own private property. They should also benefit those who share common wealth.
Third, we should imagine and design multiple pieces of the commons sector—that is, organized forms we want the commons to take. And we should build and test our models wherever possible. Frequently in the past, models developed locally have both replicated on their own, and risen to the national level. That’s how Social Security and many of our environmental laws emerged.
Roles for All
To build Capitalism 3.0, we each have unique roles to play. I therefore address the final pages of this book to a variety of people whose participation is critical.
You want the best for your children. You want them to be safe, to fulfill their potential, to pursue happiness. What, then, will you leave to them? I’m not talking about money; I’m talking about nonfinancial gifts—a strong community, a vibrant culture, a healthy planet. Can you—can we—leave those kinds of gifts?
Yes, we can—if we join with others. And there are many ways to join. We can do it face-to-face, or online with like-minded strangers. We can do it through organizations and elections. We can do it in our churches, synagogues, and mosques.
No one can single-handedly change a community, or America, or the world. But we can join with others to do so. Who, how, and what you join is entirely up to you. That you do it, and do it this year, is my request.
You had it good for a while. Thanks to labor unions, you lifted yourselves into the middle class. You got paid vacations, forty-hour workweeks, time-and-half for overtime, health insurance, a pension, and most of all, job security. Even companies without unions paid well and offered lifetime employment if you wanted it. There was a social contract, if not a legal one, between employers, workers, and communities. This was America’s version of the welfare state, and if you were part of it, it wasn’t bad. But those days are dust.
In today’s global marketplace, capital moves at the speed of light, and you’re just a cost to be minimized. What management seeks—what capital demands—is more profit next quarter. Did you give the best years of your life to Acme Inc.? Too bad. Nothing boosts the bottom line faster than downsizing, outsourcing, or playing games with your pension fund. And forget about help from the union; it’s toothless now. We’re all on our own.
What can you do? Truthfully, not much. In the era of global capital, your form of income—wages—is at a serious competitive disadvantage. But over time, things can get better. The way out—for your kids, if not for you—is through a new version of capitalism that gives you (and everyone else) property income from a share of common wealth. That share is your birthright. It can’t be downsized or outsourced. It pays some dividends in cash, and others in no-fuss health care, free Internet access, healthy food, clean air, and lots of places to go fishing. So claim your birthright, and your children’s. Claim it in living rooms, at church, in barbershops, and hair salons. This is how movements begin.
You more than anyone know the tricks of capitalism. You know how to turn a little money into a wad. (Most of these tricks involve taking something from a commons.) But later, when you count your takings, do you think you merited every dollar? Or do you sometimes wonder, “Did I, or do I, get too much?”
Well, let me be blunt: you do get too much. But don’t get your dander up; I’m not saying you’re a scoundrel. I’m saying, rather, that capitalism as we know it over-rewards people who own private property. It’s a system flaw, not a personal flaw. Its harm lies not so much in the luxuries it bestows on you as in the necessities it denies to others and the distortions it brews throughout society.
I don’t expect you to surrender all your excess rewards at once. That would be asking more of you than I’m prepared to ask of myself. But I do ask you to consider doing two things: (1) Give back some of your excess takings now, and the rest when you die. And (2), if fellow citizens ask for a system upgrade that rewards noncapital owners more fairly, don’t fight them. Let them have it. It will work. And it will be good for your kids and the planet.
You’re going to change the world. You will build the new commons sector, one piece at a time. You’ll be the unsung, or modestly sung, heroes and heroines of Capitalism 3.0.
A commons entrepreneur, like a private entrepreneur, is a visionary, a catalyst, a starter. You see a need that isn’t being met, and a way to meet it. You bring people together, come up with a plan, and make it happen. Sometimes it works, sometimes it doesn’t. The difference is, a commons entrepreneur doesn’t get stock. You’re motivated by a different force, a desire to give back. You aren’t selfless; you enjoy success, recognition, and even money. But on balance, your desire to contribute to shared wealth outweighs your desire to accumulate private wealth. Accordingly, you choose the commons over the corporate sector.
A commons entrepreneur can work almost anywhere. Take a stroll around your neighborhood. What’s missing? A community garden? A bike path? A wi-fi hot spot? A food-buying club? Make it happen! Whether your interests relate to a river, a form of culture, or the planet, get involved. Adopt a commons. Learn everything about it. Fall in love with it. See who’s in charge. Then join or build an organization to revive it.
If you want a role model, consider Tim Berners-Lee, the inventor and promoter of the World Wide Web. Berners-Lee was a programmer at CERN, the European high-energy physics lab, when he had an idea to simplify the Internet through hypertext. Readers of an Internet page would simply click on a hypertext link and be transported automatically to another page, anywhere in the world. No more clunky protocols only geeks understand. Just one seamless information space, freely accessible to all.
Berners-Lee wrote the codes for Hypertext Transfer Protocol (HTTP) and Hypertext Markup Language (HTML). More importantly, he persuaded CERN to release them into the world with no patents, licenses, or other strings attached. This made it possible for anybody to adopt them without fear of lawsuits or ever having to pay a penny. Within a few years, the World Wide Web was ubiquitous. Berners-Lee then moved to MIT to lead an international consortium dedicated to preserving the Web as a nonproprietary space.
At numerous points along the way, Berners-Lee could have started or joined a business, and in all likelihood he would have reaped millions. At each point, he declined. “I wanted to see the Web proliferate, not sink my life’s hours into worrying over a product release,” he explained. Making a contribution to the commons was more important to him than taking out a bundle for himself.
As a commons entrepreneur, your work is more difficult than your corporate counterpart’s. That’s because you’re treading in uncharted waters. The commons you seek to protect will probably lack property rights, and getting them can take years or decades. In fact, rounding up property rights will frequently be the first thing you do. That’s in addition to rounding up money, which is tough enough.
Ultimately, you should strive to leave behind an institution that protects your beloved commons for generations to come. This is the measure of your success.
You are the architects and defenders of property rights. You’re well compensated by private property owners for your labors. Now is the time to lend more of your talents to the commons.
Your job is to design and defend inclusive forms of property that spread benefits to as many, rather than as few, as possible. To do this, you must play both defense and offense. On defense, be on high alert for “takings” from the commons—they happen all the time. I’m not talking about takings by government, but about takings by corporations, which occur far more frequently yet are much less noticed. Pollution is a taking, noise is a taking, capturing nature’s scarcity rent is a taking. Your first job is to defend the commons against such enclosures.
Your second job—the offensive part—is to forge new property rights for the commons. These can be blends, like conservation easements. Be creative. Private and common property can often mesh together to the benefit of both. Making that happen is your gift.
As a thought experiment, include common property trusts in your models. Imagine they’re accountable to future generations and all living citizens equally. Imagine further, where appropriate, that they control valves that regulate aggregate use of scarce commons. Then play with quantities, prices, and income streams. If numerical precision isn’t possible, use orders of magnitude. See what happens to GDP and the commons side of the ledger, to intra- and intergenerational equity, and to nature. Then report your findings to the world.
If you’re not a modeler, work on institutional design. How should trusts be structured? What assets should they manage? What property rights should they own? Remember that property rights and operating systems aren’t fixed forever. They’re evolving social arrangements, and you can affect them.
We are of many faiths in America, yet we all agree on this: creation is sacred and humans are responsible for guarding it.
If we as a species are responsible for God’s gifts, then we’d better get on with the job. Our current performance is disgraceful. We’re fouling the air, pillaging the forests, mining the oceans, and killing species at an ungodly rate. A wrathful deity would strike us dead; a more compassionate one might merely melt the ice caps.
It’s time to stop arguing over the history of creation and start focusing on its future. Its future, at this moment, looks grim. People of every faith, and of no faith, must join together to protect creation. This is at once an ecumenical and a holy task. If our species is to fulfill its special role as creation’s guardian, we must immediately put our economic machine in order. Please help.
Everyone wants your attention. Channel 5 is on line 3 and a powerful lobbyist is at your door. It’s hard for you to see the forest for the trees. What can I possibly tell you?
What I want to tell you is, there’s a fork in the road. On one side lies capitalism as we know it; on the other, an upgrade. You must decide which branch to take. Your choice has vast ramifications. Very possibly, the fate of the planet is in your hands. Trillions of dollars are also at stake. I want you to be courageous. I want you to choose the upgrade.
But that isn’t what one says to a politician. What one says is, we need to reduce our dependence on foreign oil, create jobs in America, and protect the environment. All those things cost money, and government doesn’t have enough. But here’s what government can do. First, delegate to an independent authority—something like the Fed—the power to cap U.S. carbon consumption. That way, when energy prices go up (which they inevitably will), you won’t get blamed. Also, make sure the carbon authority pays dividends, like the Alaska Permanent Fund. Then, when checks are mailed to your constituents, you can take credit.
Second, talk about jobs and energy independence in your speeches. And push for an American Permanent Fund financed by sales of pollution permits. Within a few years, thousands of people in your district will be installing new energy systems and cashing dividend checks. You’ll be a hero.
Finally, tell your donors not to worry. You’re a low-tax, small government, pay-as-we-go kind of person. You think the environment should be protected through market mechanisms. You favor an ownership society in which every American has a tax-deferred savings account and no child is left behind.
A New Economy for a New Era
The twenty-first century can’t be a continuation of the twentieth. We’re too close to too many tipping points for that.
But if it’s not a continuation, what then? Then, it seems to me, we’ll need a new economic operating system, because if we stick with the current one, huge bills will come due, tipping points will flip, and with some likelihood, things will spiral out of control.
The road to a new operating system isn’t short or clearly lighted. We—meaning all of us together—will have to agree first on premises, and then on some basic design principles. We’ll have to test theoretical models in the real world, then debug them as needed. Eventually, we’ll have to scale up.
What I’ve sought to do in this book is to light this road. I’ve imagined a new operating system and called it Capitalism 3.0, though the name matters less than the substance. It involves balancing our selfish desires with our joint responsibilities, and embodying those responsibilities in our economic operating system.
What’s particularly nice about Capitalism 3.0 is that we can install it one piece at a time. We needn’t shut the machine down, or delete the old operating system, before installing the new one. Indeed, we’re not even replacing most of the old operating system, which is fine as it is. Rather, we’re attaching add-ons, or plug-ins, that allow for a gradual and safe transition. A formula for describing this is: Corporations + Commons = Capitalism 3.0
Like the governor of James Watt’s steam engine, these add-ons will curb our current engine’s unchecked excesses. When illth of one sort gets too great, the new bits of code will turn the illth valve down, or give authority to trustworthy humans to do so. If money circulates too unequally, the new code will alter the circulation, not by redistributing income but by predistributing property. It will make similar adjustments when there’s too much corporate distortion of culture, communities, or democracy itself.
What’s also nice about the new operating system is that, once installed, it can’t be easily removed. That’s because it relies on property rights rather than government programs that are subject to political ebb and flow. If you have any doubt about this, consider the staying power of Social Security and the Alaska Permanent Fund, both of which distribute periodic payments that have attained the status of property rights. Social Security is over seventy years old and has never been cut once; in 2005, it survived a privatization campaign led by President Bush. Similarly, the Alaska Permanent Fund, now more than twenty-five years old, repelled an attempt in 1999 to divert part of its income to the state treasury.
This third version of capitalism is a logical successor to the first two. In Capitalism 1.0 we had a shortage of goods, in Capitalism 2.0 a surplus. In Capitalism 3.0 we’ll have plenty, but not too much. We’ll have more things we truly need—healthier ecosystems, communities, culture—and fewer thneeds. We’ll have a proper balance between our “me” and our “we” sides. We’ll be more connected and less isolated, more secure and less stressed. Overall, I’d venture, we’ll be happier.
We’ll have some new traffic rules on this road. Rights now enjoyed exclusively by private capital will be matched, or even trumped, by rights held in trust for future generations. Similarly, the ability of private wealth owners to receive income and inheritances will be matched by the ability of everyone to receive them. And risks we now face individually, such as illness, will be tempered by shared risk pools that exclude no one.
The biggest change will be in the third algorithm I described in chapter 4: the price of nature will no longer be zero. Instead, the price of nature—or at least, of the scarcest and most endangered parts of nature—will gradually rise. This will compel corporations (and consumers) to internalize many of the costs they now externalize. This, in turn, will drive them to invest and consume in ways that, over time, do less harm to nature. Businesses will invest in clean and renewable energy technologies. Farmers will use fewer chemicals, and local food will outcompete food grown far away. Consumers will shift from driving alone in gas-guzzlers to more convivial forms of transport and less dashing about. Housing will move from sprawling suburbs to small towns and tall cities.
Not everything, however, will change. Winners in the marketplace will still enjoy privileges. Government won’t overregulate our private lives or businesses. Nobody’s private property will be expropriated. Markets will remain dynamic.
And, for businesspeople, here’s the best part: Capitalism 3.0 will preserve the driving force of American capitalism, the profit-maximizing algorithm. It will do this not only by leaving the algorithm alone, but also by giving all Americans, via the American Permanent Fund, a financial stake in its success. All Americans will benefit both from nature’s health and from the health of corporations.
Capitalism 2.0 had its moments. It defeated communism, leveled national boundaries to trade, and brought material abundance never seen before. But its triumph was accompanied by huge unpaid bills, debts that are now coming due.
Perhaps we ought to think of ourselves as a company in bankruptcy. We can’t pay all of our bills, but we can pay some, especially if we stretch the payments out. In some cases, we can compensate debt holders with equity. In any event, we need to reorganize our economy so, in the future, we don’t run up the same debts again. That’s what Capitalism 3.0 would do.
But Capitalism 3.0 also has a higher purpose: to help both capitalism and the human species achieve their full potential. To do that, our economic machine must stop destroying the commons and start protecting it. At the same time, it must lift the bottom 95 percent of humans at a faster rate than it raises the top 5 percent. This requires more than compassionate rhetoric, or a few bandages around the edges. It requires an upgrade of our operating system.
I hope this book has shown how that can be done. It won’t be easy, but we can do it. We have the know-how and the wealth. All we need now is the will.
- “I wanted to see the Web proliferate . . .”: Tim Berners-Lee, Weaving the Web (San Francisco: HarperSanFrancisco, 1999), p. 84.
- Alaska Permanent Fund: In 1999, Alaska’s budget was in the red, and rather than raise taxes or cut expenditures, legislators tried to raid the Permanent Fund. After, however, voters in a referendum rejected their plan by 84 to 16 percent, the politicians gave up. “Voters Say Loud, Clear ‘No,’” Anchorage Daily News, Sept. 15, 1999, p. A1.
This is a chapter from Capitalism 3.0: A Guide to Reclaiming the Commons (e-book).
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