"Common wealth—which is to say, wealth that rightfully belongs to all of us together—comes in tangible and intangible forms. It includes tangible gifts of nature such as our atmosphere and ecosystems, and intangible human creations such as our financial system. It also includes the value added by complex systems within our economy—the ‘emergent’ value that exceeds the summed value of a system’s parts. Consider what would happen if the Internet, our power system, or our monetary system crashed—the parts of these systems would have little value on their own. It’s the whole that creates most of the value of the parts.
All of this common wealth is hugely valuable. We couldn’t live without it, and we certainly couldn’t have the amazingly productive economy we now have without it. The trouble is that the market doesn’t see this common wealth—it’s like the dark matter of the economic universe." (http://www.kosmosjournal.org/article/economics-for-the-anthropocene/)
"Common wealth has several components. One consists of gifts of nature we inherit together: our atmosphere and oceans, watersheds and wetlands, forests and fertile plains, and so on. In almost all cases, we overuse these gifts because there’s no cost attached to using them.
Another component is wealth created by our ancestors: sciences and technologies, legal and political systems, our financial infrastructure, and much more. These confer enormous benefits on all of us, but a small minority reaps far more financial gain from them than do most of us.
Yet another chunk of common wealth is what might be called “wealth of the whole”—the value added by the scale and synergies of our economy itself. The notion of “wealth of the whole” dates back to Adam Smith’s insight two-and-a-half centuries ago that labor specialization and the exchange of goods —pervasive features of a whole system—are what make nations rich. Beyond that, it’s obvious that no business can prosper by itself: all businesses need customers, suppliers, distributors, highways, money and a web of complementary products (cars need fuel, software needs hardware, and so forth). So the economy as a whole is not only greater than the sum of its parts, it’s an asset without which the parts would have almost no value at all.
The sum of wealth created by nature, our ancestors and our economy as a whole is what I here call common wealth. Several things can be said about our common wealth. First, it’s the goose that lays almost all the eggs of private wealth. Second, it’s extremely large but also (like the dark matter of the universe) mostly invisible. Third, because it’s not created by any individual or business, it belongs to all of us jointly. And fourth, because no one has a greater claim to it than anyone else, it belongs to all of us equally, or as close to equally as we can arrange.
The big, rarely asked question about our current economy is who gets the benefits of common wealth? No one disputes that private wealth creators are entitled to the wealth they create, but who is entitled to the wealth we share is an entirely different question. My contention is that the rich are rich not so much because they create wealth, but because they capture a much larger share of common wealth than they’re entitled to. Another way to say this is that the rich are as rich as they are—and the rest of us are poorer than we should be—because extracted rent far exceeds virtuous rent. If that’s the truth of the matter, the solution is to diminish the first kind of rent and increase the second kind." (http://evonomics.com/dont-ditch-capitalism-tax-extractive-side-effects-fuel-growth-barnes/)
We need to make invisible common wealth visible through Common Wealth Propertization
"common wealth is hugely valuable. We couldn’t live without it, and we certainly couldn’t have the amazingly productive economy we now have without it. The trouble is that the market doesn’t see this common wealth—it’s like the dark matter of the economic universe. And that’s what needs to change.
We need to make invisible common wealth visible.
The way the market ought to see common wealth is as wealth held in trust for future generations, for other species (when appropriate), and for all living persons equally—or, as legal scholar Carol Rose put it, as “property on the outside and commons on the inside.” For this to happen, common wealth must be embodied in legal entities that the market sees and respects. Outwardly, such entities would look like corporations, but inwardly they’d be coded to protect their assets for future generations and to share current income (if there is any) equally.
In Capitalism 3.0, I called this process of legally embodying Common Wealth Propertization — which shouldn’t be confused with privatization, which is the giving or selling of common wealth to private owners. Propertization keeps common wealth common, while at the same time protecting it from private takeover. A great example is the community land trust.
My argument then is that propertization of selected pieces of common wealth, if done to scale, can fix capitalism’s two great tragic flaws. By making invisible common wealth visible, it can make the invisible hand of the market smarter and fairer." (http://www.kosmosjournal.org/article/economics-for-the-anthropocene/)
Complexity Economics, Climate Change, and Common Wealth
"Let me end this brisk tour of economics by mentioning a new school of economic thinking based on systems theory. This school is sometimes called ‘complexity economics,’ and one of its leaders is Eric Beinhocker, director of the Institute for New Economic Thinking at Oxford. The basic idea of complexity economics is that an economy, like nature, is a complex adaptive system whose large-scale patterns emerge from the interaction of autonomous agents following simple, internally-coded rules. Another of its tenets is that if a complex system is to remain near equilibrium, its positive and negative feedbacks must be roughly in balance.
The way the market ought to see common wealth is as wealth held in trust for future generations, for other species (when appropriate), and for all living persons.
Positive feedback is amplifying—i.e., it reacts to an action by doing more of it. The classic example is the screech you get from a sound system when the microphone is too close to the loud speaker. Negative feedback is corrective; the classic example is the thermostat. The danger in any complex system is that amplifying feedback will outweigh corrective feedback. When that happens, the system will flip into runaway mode and eventually crash.
The trouble with our current economic system is that its agent population and its feedback mechanisms are both out of balance. In terms of feedback, amplifying feedback far outweighs the corrective kind—thus, the exponential growth of human economic activity and the accelerating rise in inequality. In terms of agents, we essentially have a monoculture of profit-maximizing corporations. These corporations are coded to externalize as many costs as possible—to take as much from workers, nature, and society as they can, and pay as little as they can get away with. Hence, climate change, wealth concentration, and the decline of our middle class.
It’s time now to pull all of these pieces together. My thinking about how to fix the two giant flaws of capitalism is essentially a mélange of Paine, Coase, and complexity economics. What holds the mélange together and makes it work is common wealth." (http://www.kosmosjournal.org/article/economics-for-the-anthropocene/)