Role of the Commons and Common Property in an Economy of Abundance

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* Article: The Role of the Commons and Common Property in an Economy of Abundance. Wolfgang Hoeschele.

URL = http://www.icape.org/b5-Hoeschele.pdf


Abstract

"Economics is commonly defined as the science of the allocation of scarce resources – on the assumption that all resources worth studying are scarce. The problem is that neo-classical economics, and the economic systems based on it, create incentives to make resources scarce and thereby more profitable for those who control them. This has serious implications for freedom, equity, and sustainability. An economics of abundance explores how we can create mechanisms to keep or make resources abundant; among these mechanisms, widely shared property is of key importance. Several old as well as newly emerging forms of the commons and of common property are discussed in this context."


Text

Introduction

"Economics is commonly defined as the science of the allocation of scarce resources. This statement assumes either that all resources are scarce (potential demand exceeds supply), or that abundant resources are not worth studying. The first assumption, that all resources are scarce, is based on the further assumption that human wants are limitless, or in other words, that greed is the one and only natural condition of human beings. If some resources in a given time and place are in fact found to exceed the level of human cupidity (e.g., fish in the sea when human populations were smaller than they are now, or oxygen from the atmosphere to breathe even today), then economists believe that there is no allocation problem and therefore nothing for economists to study. This kind of economics makes some unwarranted assumptions about human nature. Most people, for example, learn to live reasonably happily within certain material limits, because always wanting more is a recipe for dissatisfaction, no matter how much one may have. Economic growth as conventionally defined is only possible through creating new needs and wants in people that they had not even imagined before; i.e., the condition of unlimited wants has to be artificially produced (creating scarcity in the process). At the same time, resources only become economically valuable if they are scarce, because only then can they be sold at a high price that yields a good profit. It is for this reason that there is an incentive to create profitable scarcities, an activity which is not simply left to chance, but is performed by what I call “scarcity-generating institutions” (discussed at length in my book, Hoeschele 2010). These institutions manipulate supply or demand or create various bottlenecks between the two in order to create scarcities where none existed before. Although some of these institutions have been widely recognized as rent-seeking behavior (for example, the creation of monopolies with government help), others are seen as legitimate economic behavior. These include, for example, “radical monopolies” as described by Ivan Illich (1972, 1974, 1975, 1976): a radical monopoly exists when people are constrained to use an expensive and resource-consuming technology or system that they do not control in preference to simpler and cheaper methods under their own control in order to fulfill their needs. A prime example of a radical monopoly is a transportation system that constrains people to use private cars and makes it difficult, dangerous, or impossible to get around by walking, cycling, or public transportation.

The fact that it is profitable to create scarcities, and that institutions have been created to make resources scarce, leads to infringement of freedom, to social inequity, and to environmental unsustainability. To take the transportation example just mentioned, foreclosing options how to move around a city curtails freedom because people come to lack choices (often, those who want to get around by walking or cycling are threatened with death). This lack of freedom especially hurts those who do not have the option to drive a car (all those too young to have a license, too old or handicapped to drive, or who cannot afford a car of their own), and is therefore socially inequitable. Highways can furthermore tear apart existing communities, usually the ones which are least able to resist. The excessive natural resource consumption and environmental degradation due to this radical monopoly include the fossil fuels consumed, the carbon dioxide emissions, the vast consumption of materials used in manufacturing vehicles and roads, and the land converted from agricultural land or natural habitats into paved roads and parking lots and into sprawling suburbs (see Gonzalez 2009). The abundance-generating answer to this predicament is not to focus on building electric vehicles powered by solar energy (although this can be part of the answer), but on transforming cities so that the space and resources available for the most space and resource-demanding forms of transportation (the private car) are reduced, and everything is done to ensure that people walking and cycling feel safe, that they can breathe clean air, that they have elbow room, that the total environment is as pleasant as possible for them. In such a context, people will need their cars less frequently, and car-sharing could become more important that individually owned cars (leading to greater efficiency of car use, and less need for parking spaces).

The underlying reason why there is an incentive to create scarcity is that there is a division between those controlling and using or potentially using a resource. For example, if only a few people own the land (whether in rural areas or cities), but many people wish to use that land (e.g., for agricultural production or for housing), then the owners of land have an incentive to withhold some of that land from use in order to drive up rents. This creates an artificial scarcity of land. If companies offering jobs are controlled by a few people (i.e., a few people own the means of production while the rest can only sell their labor), the employers have an interest in hiring as few people as possible so that the “reserve army of the unemployed” can keep everybody’s wage demands low. This creates a scarcity of jobs, with some people working overtime in order to retain their jobs and others being unemployed, even while society as a whole would be served better if everyone’s working hours were reduced. If one group of people (the “producers”) sell a set of commodities to another group of people (the “consumers”), then the former have an interest to con the latter into buying more, even if the consumers left to themselves would be satisfied with what they have.

The communist or statist response to this kind of issue is to nationalize property. This does nothing to solve the problem, however, because there is still a division between those who control the resources (the bureaucracy) and those who need to use them (everybody else). Hence, there is a built-in incentive for the bureaucracy to create various kinds of scarcity for the entire population. It would be very difficult to build up the degree of democratic accountability that would be required to keep such a bureaucracy under control, quite apart from the problems even a well-meaning bureaucracy would face in trying to manage all the information needed in order to make good decisions.

However, it is possible to create various forms of common or shared property – property that is held by collective entities that may include the productive users of a given resource (e.g., pastures or forests owned by a village community), the worker-owners of a business (a worker cooperative), or the customer-owners of a natural monopoly (such as a utility). In order to ensure that every co-owner has real ownership rights, it is important to establish democratic rules of control, and it is best to follow a rule of subsidiarity – keep control at as local a level as possible. The Mondragon cooperatives in the Basque country of Spain have implemented such a rule by splitting up cooperatives that grow beyond a certain number of employees. What kind of common property is appropriate varies for different types of resources and resource uses, as discussed in my book and summarized in a website (Hoeschele 2011). If these forms of common property are structured well, then the interests of the individual members will tend to align with the interests of the larger collective as well as with the long-term sustainability of the resource or asset in question. For example, co-owners of a commons who know that many of their own children will continue to depend on those commons, and who know that their own income in old age will depend on that commons, and who recognize themselves as part of a larger community where it is sometimes necessary to disregard one’s immediate self-interest for the sake of everyone’s (including one’s own) longer-term interest, will tend to make decisions designed to ensure the long-term survival of that commons. That keeps the natural resources involved abundant. Similarly, co-owners of a worker cooperative often reduce the hours worked by everybody if there’s a short-term downturn of demand in order to keep everyone employed (they’re co-owners after all), and will look for strategies to keep employment at home in the face of longer-term downturns in sales (e.g., by branching out into new product categories), rather than cutting costs through outsourcing. That tends to keep jobs abundant.

A greater role for common property would also create what John Rawls has referred to as “property predistribution” as opposed to “income redistribution.” If property is distributed highly unequally, complex mechanisms of income redistribution are needed in order to create some semblance of equal opportunity for citizens; this is a process fraught with political conflict which is often highly arbitrary, and in which the wealthy are able to bring disproportionate influence to bear. If property itself is more equally distributed, and governed by rules that prevent excessive concentration of property in the hands of a few people, then not only is cumbersome government intervention largely unnecessary, but also most people will see the resulting property and income distribution as basically fair. For example, it is intuitively obvious for most people that clean air belongs to all of us equally; if this is seen as a property right and polluters are required to pay for the pollution they cause, then it is clear that everyone should receive an equal share of the revenue.

The ramifications of a structurally more equal property distribution would extend into the labor market, because if everyone received a share of property-based revenue streams (rent), it would be possible not to sell one’s labor and yet have enough income to live in dignity. This means that the labor market would become truly free – i.e., anyone would be free to withdraw from that market if they wished. The bargaining power between employers and workers would be relatively equal, rather than skewed in favor of employers, which would push up the effective minimum wage. For people starting their own businesses, the fall-back position in the case of failure would be far more comfortable than at present, which would encourage more people to start new businesses. This would make it more difficult for established large companies to dominate markets and to retain their own key personnel. The fact that these companies would lose market share and pay a larger share of their revenue as salaries to their ordinary employees would leave less revenue for paying huge salaries for their top management, leading to a reduction in maximum incomes. Therefore, property predistribution would lead to a narrowing of the divide between minimum and maximum incomes both by raising the minimum and lowering the maximum, while enhancing freedom and minimizing reliance on government intervention.

The consequences do not stop here. A more equal distribution of property and income would mean that there would be more demand for the kinds of things ordinary people need, and less demand for the items the extremely wealthy tend to buy. This might mean inflation of prices for food, for household commodities, for furniture and the like, which would simply be a signal for more of these things to be produced and would hopefully make it possible for the producers of these things to make a living without cutting their own costs to the minimum. There would also be deflation affecting the things rich people buy with their money – an end to overvalued stocks, to excessive speculation on foreign currency markets, to overpriced artworks by famous (and usually dead) artists, and to the chase after new financial derivatives which ensues when profit rates in the real economy are stagnant.

In the following sections, I discuss how several forms of common property may promote abundance, the condition when all people can thrive today, while ensuring that people in future will also be able to thrive. I start with a case which is quite well established, though it has its imperfections – the case of the Mondragon worker cooperatives. I then proceed to a classical case of commons – fisheries. It is reasonably well known that fisheries can be managed as a commons, yet often they are not, and I will use the case of the fisheries off the coast of Baja California Sur to discuss the possibilities. Next, I turn to a discussion of “knowledge commons,” which becomes a bit more visionary in a world where intellectual property rights are becoming increasingly restrictive, even while there is a growing internet-based resistance movement. Finally, the section that is least based on existing structures discusses proposals to make the atmosphere the common property of all humans.


Mondragon Worker Cooperatives

The Mondragon worker cooperatives in the Basque country of Spain are probably the most famous worker cooperatives in the world, because of their long-term success in providing stable employment to a large number of workers in a large number of coops ranging from industrial production to food retailing, business services and banking to education. According to the website of the Mondragon Cooperative Corporation (MCC, for the English language version see http://www.mcc.es/ENG.aspx), the complex that started with a single company in 1956 now includes 256 companies, of which about half are cooperatives. Among the approximately 90,000 workers, about a third are worker-owners of the companies in which they work, but there are plans to increase this number rapidly to 75%. This rapid increase is expected to result from the conversion of the recently acquired Eroski company, a retail chain that employs 50,000 people in 2400 stores across Spain, to fully cooperative ownership, which is a process that requires several years. A large percentage of the employees without prospect of co-ownership work in Mondragon subsidiaries in foreign countries, many of which are not cooperatives (about 16% of total Mondragon employment is in foreign countries). The MCC claims to be the seventh-largest business corporation in Spain in both sales and employment. This is truly a sizeable organization!

The Mondragon cooperatives have attracted a large amount of international attention; there is even a kind of Mondragon tourism of people coming to visit to learn about their management methods. There is hence a sizeable scholarly literature about Mondragon. I will here only draw on two recent contributions in order to draw out a few important connections between shared ownership and abundance.

Worker ownership of a company should theoretically have the following benefits: more equitable distribution of the revenue (as measured for example by the income gap between the CEO and shop-floor workers), direct worker involvement in management decisions and thus worker empowerment, and more stable employment in that worker-owners have an entitlement to their jobs. In practice, these benefits may of course be compromised, for example by decision-making processes that are not adequately democratic, or by a division of the workforce where only some workers are worker-owners, while others have no prospects to acquire an ownership share. Literature on the Mondragon cooperatives suggests that the record is less than perfect; an abundance-oriented approach would lead to suggestions for specific kinds of changes.

Kasmir (1996) has provided one of the more critical studies of the Mondragon cooperatives, finding that many workers feel that they are excluded from meaningful decision-making. In one case, this even led to a strike, in the Ulgor factory in 1974 – worker-owners striking against themselves should be unthinkable if the cooperatives were working as intended! In a study of one Mondragon cooperative, Fagor Clima, Kasmir found that dissatisfaction resulted from the fact that the Management Councils, which run a company in its daily affairs, end up doing a poor job of promoting worker interests, despite the fact that they are appointed by the Governing Council that is elected by all the worker-owners. A Social Council, elected by the workers, is supposed to represent worker interests in daily operations, but is hampered in its activities because workers are not allowed sufficient time off for involvement in these councils, and because Social Councils are not allowed to hire external consultants in order to review business plans, financial reports and the like (unions under Spanish law are allowed to do these things). Hence, some workers feel that their interests would be better represented if they worked in a capitalist factory and had a union. Kasmir presented evidence that this sentiment is found not only among people working for Fagor, but also other Mondragon cooperatives.

Despite these critiques, Kasmir’s work also provides powerful evidence for the benefits of the Mondragon cooperatives. In her study, she wished to compare labor-management relations in a mid-sized cooperative firm to a similarly sized “standard” capitalist firm in the same sector and locality. While she was easily able to find a suitable cooperative firm in Mondragon, she was not able to find a good capitalist comparison because the capitalist companies had either recently downsized and relocated production elsewhere, or had adopted some of the principles of cooperatively run factories (e.g., sharing some of the profits, keeping workers informed through regular meetings, providing better job security) and could no longer be regarded as “standard capitalist firms” (Kasmir 1996: 123-6). In order to find a suitably capitalist company, she had to widen the geographical scope of her search and found a company in a nearby town. This shows strong evidence that the Mondragon cooperatives provided more stable employment, and changed the bargaining relationship between employers and workers in capitalist enterprises because workers had the option to work for a cooperative instead.

A more positive evaluation of the Mondragon cooperatives can be found in Gibson-Graham (2006, Chapter 5). Gibson-Graham recognize various deficiencies in Mondragon’s record, but choose to read them as “the complex, surprising, unfinished outcome of innumerable contingent acts and decisions” (p. 103) which can inform efforts to build community economies both in Mondragon and elsewhere. Yet, one issue that they address is particularly problematic: the fact that Mondragon has abandoned its cooperative principles in many of its plants abroad. While some of its investments abroad have been motivated by obtaining access to markets and are organized as cooperatives, others, as for example in Thailand, are motivated by the search for cheap labor and are organized as conventional capitalist firms. The strategy privileges Basque workers over others in that it seeks to keep as much employment as possible in the Basque region, and uses technological innovation for the purpose of bringing employment “back home” whenever possible. Gibson-Graham cite the Mondragon web site as claiming that the lack of cooperative laws, or of “co-operative members who understand and are committed to the co-operative culture” (p. 122) in the countries into which they have expanded as preventing them from creating cooperatives there. However, if some of their production is only viable in places with cheap labor, it would still be possible to restrict their search for new business locations to countries which do allow for cooperatives; for example, cooperatives are allowed and already exist in India, a country with cheap labor as well as a broad industrial base that would allow for the production of almost any industrial product.

As discussed in a variety of publications, the Mondragon cooperatives do make sure that they do not need to dismiss any worker member, for example through an internal referral system that allows a worker to transfer to a different cooperative if the current employer needs to downsize. This appears to have an impact on the regional unemployment figures. Currently, Spain is severely affected by the economic crisis, with official unemployment rates exceeding 20% for the country as a whole, and around 30% in some regions (e.g., Andalucia and the Canaries)(statistics obtained from the website of the Instituto Nacional de Estadistica, INE). The two regions where the Mondragon cooperatives have the strongest presence, namely the Basque country and the neighboring region of Navarra, provide a marked contrast. The INE statistics for 2005 to 2011 show these two regions as having among the lowest unemployment rates throughout, but particularly since the onset of the economic crisis. While unemployment rates for Spain as a whole increased from around 8% in the years 2005-2007 to 18% and more since 2009, those rates for the Basque Country and Navarro increased from 5-6% in 2005-2007 to 10-12% since 2009, a much more modest increase. Comparing the third quarter 2011 to third quarter 2007 figures (the year when Spanish unemployment rates reached their lowest point), unemployment rates in the Basque Country and Navarra increased by 6.1% and 7.3% respectively, which is a lower increase than all other Spanish regions. These numbers do not prove that cooperatives were responsible for economic stability in the Basque regions of Spain, but they are certainly suggestive.

The reported shortcomings of the Mondragon cooperatives stem from an incomplete adoption of principles of cooperative ownership and control. A more resolute and creative implementation of these principles would promote abundance, reducing alienation at work, and allowing for more workplace democracy. Despite their imperfections, the Mondragon cooperatives assure an exceptional degree of workplace security, and enable workers to benefit from the fruits of their own labor. If workers have the real option of working at a cooperative that offers them ownership shares, they may enjoy a better bargaining position vis-à-vis employers, making the labor market more free. By way of contrast, concessions made to workers by management in privately owned firms can be withdrawn in the case of any number of economic contingencies. Thus, by eliminating the structural opposition between employers and workers, cooperatives can make jobs abundant for working people, both during boom and bust phases of an economy.

Fisheries of Baja California

Fish and other marine organisms that freely move around in the open sea cannot be owned – they only come into private or other ownership once they have been captured. However, there can be collectively imposed property rights regulating who is allowed to fish where and when, and using which methods. An interesting case has been described by Emily Young (2001) in two localities along the Pacific Coast of Baja California Sur, Mexico. In the 1920s and 1930s, these localities (Laguna San Ignacio and Bahia Magdalena) were rather isolated and distant from markets. Small communities of fishers fished for subsistence purposes as well as transporting dried fish to markets by burro (a 12-day trip) or selling them to passing merchant ships. At that time, there was an essentially open access regime (absence of property rights), which was sustainable because demand was limited by the small local population and the difficulty of accessing markets elsewhere.

As transportation infrastructure was extended to these places and the Mexican state became interested in developing the fisheries from the 1930s onwards, the open access regime was replaced by a complex and contradictory set of property rights. Federal laws created three sets of fishers, pescadores libres, cooperativistas, and permisionarios. The “free” fishers were allowed to fish from local fishing grounds for subsistence purposes only (and were thus not allowed to sell their fish), while members of cooperatives were given concessions to fish commercially valuable species (e.g., abalone, lobster, and sea turtle), but were allowed to sell these only to a government-owned monospony company which sold these products abroad. The permit holders were allowed to harvest fish not reserved for the cooperatives, and could sell them on the open market. The government continued to claim the right to enforce regulations, such as fishing seasons, quotas, and restrictions on equipment. This not only created a complex set of overlapping private, communal (cooperative) and state property rights that were technically difficult to enforce, but also left enforcement to a government that had relatively little stake in the preservation of the resource. The result was overfishing and the degradation of the fisheries.

With the advent of neoliberal policies in the 1980s and 1990s, fisheries were liberalized in Baja California Sur. Cooperatives no longer had exclusive fishing rights to certain species, and had to compete with permisionarios for permits to fish the same species. The monopsony buying company was privatized and deprived of its exclusive buying rights. The access to international markets was further facilitated. This led to increased profit potential in the fisheries, more incursions by fishing companies from outside, and more conflict between different groups of fishers. Now there was a mix of private and state property rights that remained equally difficult to enforce, and government still had little stake in the preservation of the resource. The result was accelerated overfishing, the creation of scarcity of fish and the undermining of local livelihoods.

A method to overcome these conflicts of interest that support what Young calls a “tragedy of incursion” would be to assign property rights to the people who have the greatest stake in preserving the local resource, and assigning the property rights to a collective rather than to individuals in order not to favor short-term individual interests over the long-term collective interest in sustainability. This could be done by identifying the fishers who are residents of the local community, and having them create a collective structure that then regulates fishing in the area – catch limits for individual species, fishing seasons, limits on technologies to be used, and so on. Collectively, they would have an interest not only in the long-term survival of the species they fish, but also in avoiding a glut in the market now that would undercut their own profitability. Individually, each member would have an interest in other members abiding by the rules, so there would be mutual enforcement of the rules. While there would have to be government support in enforcement (e.g., preventing the incursion of large trawlers from outside), the overall government enforcement effort could be drastically reduced. Hence, a shared ownership mechanism that ensures that the collective interest in the preservation of the commons prevails over individual or outside interests would also ensure the continued abundance of fish, and of fishers’ livelihoods. Such goals have apparently been achieved in the case of some fisheries through catch-shares, where fishers within a fishing community can acquire the rights to a certain percentage of the total (both now and in the future), and each year’s catch is determined through study of the fish populations (Environmental Defense Fund 2011).


Knowledge and Intellectual Property Rights

Knowledge lends itself to abundance because it can be shared among an unlimited number of people without being diminished for anybody. Furthermore, the more people have access to a certain domain of knowledge and apply it, the more people can and do add new knowledge to the existing knowledge base (see Bollier 2003; Lessig 2001). This realization has led to the high value accorded to free and open sharing of knowledge among the academic community, to public education, to the creation of libraries, to the free sharing of knowledge on the internet, to the open-source software movement, to the creation of Wikipedia, and to a host of other old and new efforts to share information and knowledge widely. Without this abundant sharing of knowledge, almost nothing we do on a daily basis would be possible.

And yet, artificial knowledge scarcity abounds. Knowledge is made artificially scarce because exclusively held knowledge can enable some people to exert power over others, or to monopolize the production of specific goods or services and thereby extract monopoly rents. A particularly important form of artificial creation of scarcity in the realm of knowledge consists of patent rights. These are commonly justified based on the argument that the monopoly profits they provide to inventors are the incentive required for innovation to happen. It is claimed that in their absence, nobody would invest in innovation anymore, and technological progress would cease or at least slow down to a trickle. This argument on behalf of patent rights can be challenged both by showing that the scarcities they generate are greater than normally acknowledged, and by questioning their salutary impact on innovation. Regarding the first point, it should be noted that new technologies would be able to diffuse throughout the world much more rapidly in the absence of patents (or if patents were respected only within the country that issues them). Companies might still seek to retain temporary monopolies by keeping trade secrets of their production methods, but their competitors (including competitors in less industrially advanced countries) would be able to use reverse engineering in order to figure out their production methods. It is thus arguable that much of the gap between rich and poor countries would disappear in the absence of patent protections; these are among the key features that preserve the “comparative advantage” of rich countries in hi-tech commodities.

Regarding patents as a motor for innovation, it needs to be noted that they provide an incentive only for innovations that allow the sale of a new product. They do not promote research that elucidates the adverse social or environmental impacts of existing technologies or products, or innovation that leads to better methods of resource sharing or that helps individuals or companies to reduce the amounts of products they buy. This distorts research priorities and affects who does the research.

Let me take the example of genetic engineering here. The field of genetic engineering research is dominated by large companies interested in either pharmaceuticals applications (within the paradigm of selling more pills to people rather than searching for other methods to become more healthy) or in agribusiness. Within agribusiness, corporations have successfully pushed for seeds to be made patentable, despite the fact that a seed is not an invention (almost 100% of the genes of a GMO are unmodified, and it can reproduce on its own, but can hardly be taken to court for reproducing!). This was an essential gambit within their business model, because they invest large sums of money in order to produce new varieties, and can only recoup those investments if farmers are compelled to come back to them year after year in order to buy the same seeds anew. If seeds were not patentable, these companies would collapse, and their innovation would indeed cease.

This does not mean, however, that innovation as such would cease. Farmers have after all continually bred new crop varieties for over 10,000 years, and the products of those millennia of innovation are now under threat from a small number of newly bred high-yielding varieties (both GMOs and conventionally bred). Farmers have innovated in the absence of patent protections, which only emerged in the 1980s, and plant breeding through conventional methods by small growers continues even today without patent protections. Even innovation through genetic engineering would be conceivable without patent protection, in one of two ways: either by government or by associations of farmers raising the funds to pay for research at universities or other research institutions. It is very likely that the research priorities would shift in this case. For example, farmers associations might conclude that they want crops that have reduced needs for expensive inputs such as fertilizers. Genetically engineering cereal grains such as wheat or corn such that they would develop root nodules in which bacteria would fix nitrogen (as in legumes) might be one such strategy. Such an innovation would drastically reduce the need for nitrogenous fertilizers (and thus also the energy demand by agriculture), which would hardly be a trend welcomed by the companies that produce these inputs (which are closely allied to the seed companies), but which would be a trend that could be welcomed by environmentalists, who are usually critical of genetic engineering.

The critical point is that innovation would not stop in the absence of patents. Instead, it would go in different directions, and it would be funded primarily by people and institutions who have an interest in the use value of those innovations, rather than by those who have an interest in their exchange value. This would dramatically change who determines what technological innovation happens, making it user-driven rather than seller driven; it would also shift innovation away from merely product innovation and toward process innovation and social innovation. Such innovations include, for example, all the innovations of the “sharing economy,” from couch-surfing to P2P car-sharing, that allow people to make more effective use of the resources they already own, while reducing their environmental impacts. In agriculture, such innovation could support more cost-effective soil-management techniques to preserve organic matter and nutrient retention, rather than purchased fertilizers – even if nobody gets to sell a product with this innovation. In health care, such innovation would support self-care and self-healing methods accessible to people suffering from diseases or ill-health, even and especially if that reduced their need for professional health care providers whose services are becoming increasingly unaffordable. It is these kinds of innovation that we really need.


The Atmosphere

The final example of shared property I will consider here is the atmosphere. The global atmosphere is truly indivisible; the air I breathe includes gas molecules that may have recently been part of the biomass of a plant or animal or human anywhere on the planet. This also means that private property in the atmosphere is impossible. And yet, pollution rights are being created and traded as private property. To a degree, such tradable pollution permits can achieve positive outcomes (as in reducing sulfur dioxide pollution in some regions), but at the level of greenhouse gas emissions into the global atmosphere, there are severe problems with the cap and trade systems so far developed. These allow big polluters to obtain free permits, which they can then sell if they reduce their pollution, instead of making it very clear that all polluters must pay the public at large for permits to pollute. And unless the revenue from the sale or auction of pollution permits benefits all people equally, cap and trade systems are likely to have regressive income effects, i.e., affecting the poor the most adversely.

A very interesting proposal that would rectify these problems has been made by Peter Barnes (2001, 2006). Building on the idea of the Alaska Permanent Fund, which distributes oil wealth equally to all Alaska residents, Barnes proposed that a similar system be established to limit carbon dioxide emissions, or other kinds of pollutants. The basic idea is that all polluters pay into a fund in proportion to the amount of pollution they emit, while all residents of an area receive payments out of that fund on an equal per capita basis, as equal co-owners of the atmosphere or of the water or land resources of an area. Instead of monetary payments, the fund could also provide for public benefits, such as health care or education, but it is critical that at least half of the payments would be in cash. The cash part of the payment would allow people toward the lower end of the income spectrum to pay for the increased costs. In fact, because people would pay in proportion to their consumption but receive on an equal per capita basis, poor people, who consume less of everything, should receive a net benefit, while rich people would pay more than they received. It is this feature which would allow environmentally beneficial higher costs for pollution or resource degradation (which lead to higher costs of many consumer products) to have a socially progressive income redistribution effect. In fact, if they did the math, poor people would lobby to increase the fees paid to polluters, because they would receive a greater payment every month that would more than compensate for any increases in their expenditures! Furthermore, because a rather small number of people in any country enjoy disproportionately high incomes, far more than half the people earn less than the average income of a country (in other words, the median income is far lower than the average income). This means that far more than half the people of a country would experience a net benefit from this system, while at the same time environmentally destructive practices would become economically inefficient.

What makes this scheme even more interesting is that the rich and middle class people would have no cause to claim that their hard-earned money is being squandered to pay for the laziness of the poor. Everyone would be receiving unearned income, and if the poor received greater payments, so would everyone else. Given that there are large amounts of unearned income (rents), it makes much more sense to spread unearned income evenly among all the people rather than allow only a few to get all those benefits! Hence, making environmental resources such as clean air and clean water our collective property in a way that is truly enforceable and provides benefits for everyone would make it possible to reconcile environmental protection with social equity. This is in marked contrast with efforts to make environmental destruction expensive, which tend to have regressive impacts on income distribution. We’d have both abundant natural resources, and abundant livelihoods!


Conclusions

Creating strong institutions of shared property can overcome many of the contradictions inherent in our current economic system. If companies are co-owned by their employees and workers, the owners no longer have an interest in making jobs scarce, with profound implications for the job market. If exploitable natural resources (such as the fisheries and the integrity of the atmosphere) are co-owned by the communities that depend on them, those communities will ensure that these resources remain or become abundant. If intellectual knowledge and information is controlled by the people who gain use-values from them (and not just exchange value), then the likelihood is increased that this knowledge is not just used to create new products of doubtful real use, but are used for innovations of all kinds that have broad and long-term benefits. Common property in all these instances can ensure that individual interests are aligned with rather than opposed to the common or public interest. Without such institutions, we will never be able to support true solidarity among people, or long term sustainable resource use. It is therefore one of the key challenges of our time to build such institutions that sustain abundance." (http://www.icape.org/b5-Hoeschele.pdf)


References

  1. Barnes, Peter. 2001. Who Owns the Sky? Our Common Assets and the Future of Capitalism. Washington, D.C.: Island Press.
  2. Barnes, Peter. 2006. Capitalism 3.0: A Guide to Reclaiming the Commons. San Francisco: Berrett-Koehler.
  3. Bollier, David. 2003. Silent Theft: The Private Plunder of Our Common Wealth. New York: Routledge.
  4. Environmental Defense Fund. Accessed Oct. 31, 2011. Catch shares: new hope for fisheries. Available at http://www.edf.org/oceans/catch-shares.
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