The Bloodless Revolution, part 2 of 2: a Review of Peter Barnes' Capitalism 3.0

by Dollars and Sense

An Econ-Utopia, brought to you by the Center for Popular Economics.

By Jonathan Teller-Elsberg, CPE Staff Economist

It's worth remembering that commons already exist, lots of them, in various places and parts of the world's economies. Most often, however, they are informal arrangements—holdovers from before the rise of modern market capitalism. In general, commons are not recognized formally by governments as a type of property arrangement deserving protection, the way conventional private property is legally protected.

It is this lack of protection that enables the famous "tragedy of the commons." Barnes argues that, contrary to the standard perception, commons aren't undermined by internal tragedies—they are victims of infringement from the outside. Marx described the enclosure of common land into private land as "the primitive accumulation of capital"; today, Barnes is primarily concerned with the ability of corporations to horn in on remaining commons as they seek new resources to exploit for private gain. A recent example is with the digital TV broadcast spectrum, with an estimated value of $70 billion but which the U.S. government gave away for free in 1996 to media conglomerates, even though the airwaves are supposed to be the shared property of all Americans.

That was a case in which the government failed to serve as a steward of the broadcast commons, buckling under lobbying pressure by the media conglomerates. It is because of this perpetual risk that Barnes does not pin his hopes on good government to preserve commons (though he has no complaints about efforts to improve the government). Instead he encourages readers to organize and agitate for the occasional moment when the government does respond to citizen pressure—and at that moment to force the government to establish commons as a legally recognized form of collective property, distinct from private property and also distinct from traditional public property. This means that a commons sector can't be established without government intervention (just as the government creates corporations as legal entities), but the one-time intervention would mark a break with the past and reshape the terrain of the economy going forward. From that point on, the economy would have three main drivers: the currently existing government sector and private capitalist sector, plus the new commons sector. As in the current economy, the lines between each sector are not always perfectly clear and distinct, but the general categories are still sensible.

Barnes' hope and prediction is that, should this occur in a substantial way (meaning, covering the establishment of several large-scale commons along with numerous regional, state, and local commons), a self-sustaining balance of powers will be created in the economy. Whereas currently the corporate sector seems to more-or-less get what it wants, a commons sector would, among other things, function as a check to corporate power; and in doing so would relieve much of the pressure that is on the government to do as corporations desire.

The book reads fast and easy: Barnes is a fine writer who totally avoids academic jargon and explains his ideas as quickly and simply as any writer I can recall. It's purely introductory material—while I am fairly well sold on his vision, I'm a bit desperate for more details. Primary in my mind is Barnes' failure to address the problems of trusteeship of large commons. He suggests that the Federal Reserve Bank serves as a model of an institution created by government but functioning as an independent force. True enough—but that leaves as much to be desired as admired. The Fed has long been criticized as beholden to the interests of corporate bankers and as having failed to live up to its government mandate to ensure both low inflation (what bankers like) and low unemployment (what the people need).

A trust is not a democratic form. How will the balance of interests of all the members of the commons community be addressed? Let's hope that Barnes continues to think and write on the subject to flesh it out. If he's on the right track, and my gut tells me he is, promotion of the commons could turn out to be a bloodless revolution that truly empowers people in a collective sense, as workers and citizens and members of society in general.

Sources and resources:

—Peter Barnes, Capitalism 3.0: A Guide to Reclaiming the Commons. Berrett Koehler Publishers, Inc., 2007. The book is available at no charge as an Adobe Acrobat PDF file here. (But the real hardcopy version is a lot more pleasant to read.)

—For everything you could ever want to know about commons, see the Virtual Library of Commons, Common-Pool Resources, and Common Property.

—On the "tragedy of the commons," see the previous Econ-Utopia, The (Sometimes) Triumph of the Commons. Also see Garret Hardin's famous article that coined the phrase. You can read Karl Marx's take on "the primitive accumulation of capital" at the beginning of modern capitalism in chapter 27 of Capital, Volume One.

—On the Federal Reserve, see the previous Econ-Atrocity, The King is Dead! Long Live the King!.

© 2007 Center for Popular Economics

Econ-Atrocities and Econ-Utopias are the work of their authors and reflect their author's opinions and analyses. CPE does not necessarily endorse any particular idea expressed in these articles.

The Center for Popular Economics is a collective of political economists based in Amherst, Massachusetts. CPE works to demystify economics by providing workshops and educational materials to activists throughout the United States and around the world. If you would like more information about CPE please visit our website. 

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8/14/2007 12:24:00 PM 1 comments

 

The Dull Compulsion of the Economic (#6)

by Dollars and Sense

A series of blog entries by D&S collective member Larry Peterson.

Neoliberals are a funny bunch. Always eager to celebrate the dignity and efficiency of the individual, they are increasingly faced with the uncomfortable fact that the worthy individuals themselves reject the very individualistic principles the neoliberals say underpin their individuality. A tricky wicket, indeed.

The latest neo-liberal pundit to confront this paradox in print is the New York Times' Nicholas Kristof. In a July 30th editorial, he recommended a book by George Mason University economist Bryan Kaplan, The Myth of the Rational Voter: Why Democracies Choose Bad Policies, calling it "the best political book of the year." Its basic argument? "That while crowds are good at making predictions, they're lousy at recognizing their own self-interest." In other words, the "wisdom of crowds," so acclaimed by neoliberals only about a year ago, is no longer sufficient to understand--and come up with solutions to--wider questions of politics and society: it must be recognized that collective predictions made by individuals in crowds will only outperform disaggregated, isolated individuals if the subject matter is more-or-less indifferent to them, like the weight of cows, or the date of a Civil war battle; the same success certainly can't be applied to political choices.

Accordingly, Caplan expostulates: "This book develops an alternative story of how democracy fails. The central idea is that voters are worse than ignorant; they are, in a word, irrational-and vote accordingly." Thus, you can forget about the massive financial power of special interests, or the stubborn materiality of ideology. It's all about four primeval "biases": a suspicion of market outcomes, and a desire to control markets, an anti-foreign bias, a neo-Luddite view that the productivity gains of downsizing or offshoring can have permanent detrimental effects on certain people affected by them, and a tendency to exaggerate economic problems.

It takes very little reflection to counter all these claims. How many truly important "market" outcomes are most Americans exposed to in the fist place, from the value of the dollar to present patent law, even if one assumes that, in some abstract sense, that markets optimize efficiency and welfare? As for the anti-foreign bias, the Economist cited a study last week in which African Americans were shown to agree far less with the ideas that immigrants are likely to commit crime or end up on welfare than whites or Hispanics. And yet, African American have lagged far behind the other groups in employment and other indicators relevant to offshoring and similar economic processes involving foreigners. On productivity, I would offer a countervailing bias: that of workers to accept compensation that doesn't begin to match productivity gains, or the corporate profits that stem from them: is that not irrational? But it's not even necessary to make this claim. For some time now, conventional economists like Princeton's Alan Blinder have been reexamining the effects of offshoring, and arguing that the standard position--which stands 180 degrees on the other side of the "bias"--needs to be reevaluated. As for the pessimistic bias, Kristof writes "Mr. Caplan focuses on economics, but there is also some evidence from research in psychology that we habitually exaggerate military risks compared with health risks." But Iraq wasn't a risk at all (didn't Kristof support the Iraq war?), and the decline in health undergone by much of the population has as much to do with the manipulation of demand by advertisers and lawyers who defend them--some of the most lucrative, and "competitive" sectors of our economy--as it does to some sort of disembodied bias.

Kristof offers, as a small step towards a solution, a call for more economics and statistics education in schools. I personally know of no public high school in the country that does not offer these subjects. But, granting that this call is not rendered thereby completely absurd, it's interesting to note that, while the former conventional economic view of rationality tended to be assumed, Kristof seems to want to turn the very assumptions placed implicitly in doubt by his hero, Caplan, as a prescription; as a result, rather than a starting point. But, without standing economics totally on its head, and resolving the question of assumptions (as heterodox and even orthodox economists are doing in a piecemeal way now), why would we want to offer them as prescriptions in the first place, especially when Kristof's ad hoc justifications for them are so poor?

At the end of the day, perhaps the best example of systematic bias would be the tendency of neoliberal pundits to, with ever greater desperation, champion simplistic, poorly-thought-out theses that confirm their prejudices, while condemning the "irrationality" of those who, with greater public support and more empirical data, are coming to reject their theories and policies. 

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8/10/2007 04:05:00 PM 0 comments