Who Owns the Sky?
By Peter Barnes

Commons-side Economics

Economics is a construct of the human mind. It’s a useful way of looking at the world, but shouldn’t be confused with reality. The map, especially the mainstream map, is much smaller than the territory.Common wealth, as we’ve seen, is immensely valuable. Common illth — the shadow side of private wealth — is likewise vast. But while mainstream economists acknowledge the existence of common wealth and illth, they don’t bother to measure them or include them in their models. They assume the commons side of the ledger is trivial, or ignore it because dollar signs are hard to attach. This is tantamount to professional malpractice.

Consider a business analogy here. The first thing any aspiring business person learns is double entry accounting. The day you open shop, or probably long before, you hire an accountant to set up your books. Whatever business you’re in, the same things are on your balance sheet: assets, liabilities and owner’s equity. Ditto for your income statement: income, expenses and profit.There’s a reason for double-entry accounting: it gives a good picture of reality. If your accountant recorded only sales revenue and not expenses, he’d give a very distorted picture of your situation, and you’d fire him for being half-brained.

Strange as it seems, mainstream economists are like that half-brained accountant. They count America’s sales (aka GDP), but not our expenses (the negative externalities of those sales).They keep track of private income and wealth, but not common wealth or illth. As a result, they miss at least half the story. It’s time for a new breed of economists to keep a fuller set of books and tell a larger story. These economists would look at the health of the commons (the balance sheet) and the trade between the commons and the market (the income statements).

They’d address such questions as: if the market does this or that, what are the effects on the commons? Who pays for illth, damagers or damagees? How can scarce common resources, ecosystems, time, peace of mind — be conserved, and their rents captured and recycled? Ultimately, their job would be to make the economic case for the primacy, if not divinity, of the commons. Mainstream economists will doubtless complain that commonsside economists can’t be as quantitatively precise as they are.

This is true, but so what? Right now, mainstream economists value the commons at zero. This is quantitatively precise, but quite wrong. Any imprecise numbers derived by commons-side economists would be a big step forward.
Commons-side economics can also serve as an antidote to supply-side economics, which has dominated public policy since the 1980s. The premise of supply-side economics is that, by reducing taxes on the suppliers of capital, production will be stimulated, GDP will rise and income will trickle down to non-owners of capital. Some supply-siders also argue that growth stimulated by supply-side tax cuts will add to, rather than detract from, government revenue. George Bush the elder once called this ‘voodoo economics’. A more up-to-date appellation would be ‘faithbased economics.’ Nevertheless, the doctrine prevails.

Supply-siders presume capital is scarce and/or indolent and must therefore be lured into action with ever-greater privileges and rewards. They further assume that most, if not all, wealth comes from profit-maximizing, and therefore any spending by government, or any money paid to commoners for anything other than their labor, is not only money misspent, but a drag on the bounty-giving of profit-seekers.

Commons-side economists, by contrast, would see the commons as a supply-side of a different sort. They’d understand the wealth that lies in the commons and describe the many ways that investing in the commons enriches more humans more efficiently than does relying on corporations.Why is this new branch of economics important? John Maynard Keynes put it best: ‘The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed, the world is ruled by little else.’

Managing the Commons

There’s a widespread (and false) belief that the commons, unlike private property, is unmanageable. This is in part due to Garrett Hardin’s essay, The Tragedy of the Commons, which argued that commons are inherently self-destructive. The truth is that there are effective ways to manage almost any commons, large or small.

The commons most desperately in need of better management are those gifts of creation that are near their carrying capacities: airsheds, watersheds, aquifers and habitats for other species (including the oceans). Other commons that need attention are: the electromagnetic spectrum, the Internet, seeds, DNA, the arts, the ‘capital commons,’ roads and streets, and ‘human mind space.’Here I set forth general principles of commons management and describes how several specific commons could be managed.

General principles

• The commons manager is a trustee on behalf of designated beneficiaries. The manager/trustee must at all times be loyal to those beneficiaries and have no conflict of interest whatsoever with commercial users of the asset.

• Unless specifically authorized to do so, the manager must not diminish the principal, or inherited value, of the asset.

• The manager must pro-actively maintain and restore the asset to assure its health and longevity.

• The manager has the right to limit usage of the asset, and the duty to do so when necessary to protect its inherited value. In cases where asset usage must be limited, the manager has both the right and duty to charge prices for such use.

• If there’s income from asset usage, the manager may spend that income for asset maintenance and restoration, equal dividends to beneficiaries and/or public goods that are specified by the trust.

• The manager shall post income and expenses on the Internet quarterly, and make a full public report to beneficiaries annually. Here’s how some specific commons could be managed:

Air trusts at various levels could manage air pollution. Unlike current regulatory agencies, these trusts would give polluters an ownership stake in clean air. They’d reward people for conserving and penalize them for polluting. Over time, they’d catalyze a transition to clean energy.

Watershed trusts would limit the amount of fertilizers and pesticides that can be used within a watershed. This would protect streams and rivers from noxious run-offs and boost incentives for organic farming. Such trusts could also hold water and development rights.

Aquifer trusts would protect underground water tables, which are being depleted faster than rain replenishes them.

A spectrum trust would charge commercial broadcasters and telecommunications companies for using our airwaves. The revenue would support non-commercial broadcasting and the media budgets of political candidates.

Cities would charge drivers for using crowded streets at peak times, and use the revenue for mass transit and bike paths.

A capital commons trust would be a giant mutual fund owned by all Americans on an equal basis. Publicly traded companies would contribute shares to the fund at the rate of 1 percent per year, up to a maximum of 10 percent of their shares. The contributions would be the price these companies pay for the socially created benefits of public liquidity — a small price for the hefty benefits. (When a company ‘goes public,’ its stock leaps spectacularly because it can be sold instantly to anyone.)

Artistic Freedom Vouchers would allow individuals to contribute refundable tax credits to creative workers of their choice, or to intermediaries who pass funds along to creative workers.
In exchange for voucher support, artists would freely share their works over the Internet. In this way, a publicly supported cultural sector would co-exist alongside a private, copyright-protected sector, without government bureaucracy.

It’s worth noting that none of these commons management models requires corporations to change their current behavior. CEOs would continue to maximize profit, while commons managers followed different algorithms. Government would facilitate the growth of the commons sector, but not run it.

A Path Forward

The vision of a healthy commons is an alluring one. The trick, however, is getting there from here. At the moment, the prospect for change of this magnitude seems dim. But history, like evolution, doesn’t proceed in straight lines; it takes big, often unexpected leaps.

I think we’re approaching the end of an era. Either there’ll be a major catalytic event (collapse of the dollar, a series of devastating hurricanes), or so much pressure on existing ideas that they’ll crack. The question is, will we be ready for the next dis-continuity? Will we know what to do when the historic opportunity arises?

At this moment, I fear we’re not ready. Our economists have been too narrowly focused and unimaginative. The same can be said for our politicians, our media, and most of our single-themed advocacy groups. So here’s what I propose:

• Our organizing principle for the next 20 or 30 years should be: reinvent and rebuild the commons. This needn’t be done all at once; it can be done brick by brick.

• We design institutions to manage commons at local, regional, national and global levels, and road-test these institutions wherever possible.

• We challenge the divine right of capital in the media, the universities and the courts. And we promote every citizen’s right to an equal share of common wealth. We won’t win at first, but we keep chipping away.

• We nourish institutional seeds. For example, land trusts, watershed councils, air quality districts and similar entities already abound. What they lack, largely, are property rights and steady revenue streams.

• We make polluters pay into trusts. After all, they’re trespassing on our common inheritance.

We build alliances with religious groups and reframe the debate about morality. Many religions believe nature is a gift of God that humans must respect and preserve. Many are also concerned about the effects of commercialism on children and families. If we do these things, we may avert planetary disaster and make ourselves happier.
Let us try, I say.