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National Commons Initiatives

Peter Barnes: Capitalism 3.0 — Chapter 9: Building the Commons Sector (pages 135-154)

Commons organizing principles are scalable; the same rules that work locally and regionally can also be applied nationally. Generally, it’s best to organize commons at the lowest level possible; that increases community involvement and transparency. Sometimes, though, the scale of the underlying commons is so large that the management structure must be national or international. Here are examples of possible national institutions.

An American Permanent Fund would be the centerpiece of the new commons sector proposed in this volume. It’s a way to fix, or at least ameliorate, capitalism’s flaw of concentrating private property among the top 5 percent of the population. It would do this, like the Alaska Permanent Fund, by distributing income from common property to every citizen equally. This would add a third set of “pipes” through which income would flow to Americans, the first two being wages and private property income.

As discussed in chapter 7, the American Permanent Fund’s income would come in part from the sale of pollution permits — mostly for carbon dioxide — and in part from the commons’ share of corporate profits. The first revenue source would be directly correlated to our efforts to curb global warming. If we decided to reduce carbon dioxide emissions, say, by 3 percent per year for the next three decades, as scientists say we must, this would generate a substantial flow of income into the American Permanent Fund. Some of that might be invested or spent on public goods, and some would be used for per capita dividends. The faster we reduced emissions, the higher these dividends would be. In effect, the dividends and public goods would be a bonus to Americans for doing the right ecological thing. Eventually, when a post-carbon infrastructure is built, carbon emissions would stabilize at a low level, and so would this revenue source for the American Permanent Fund. By this time, the second revenue source — dividends from holding a portion of publicly traded corporate shares — would kick in. This revenue source would give every citizen a stake in increasing corporate profits, just as the first source gives them a stake in decreasing pollution. Who could object to that combination?

Getting the Permanent Fund up and running, even if it starts small, would be a crucial precedent and signal. Like the Social Security Trust Fund, it would be a pipeline through which more money would flow over time. It would establish a fundamental principle for the commons sector — one person, one share. And it would change the way Americans think about our economic relationship with nature: every penny not paid by a polluter would be a penny out of everyone’s pocket. It wouldn’t be just future generations, then, who experience a loss when nature is degraded; the bank accounts of living Americans would suffer as well. Irresponsibility toward the future would carry an immediate and widely felt price.


The Children’s Opportunity Trust is the second big piece of national commons infrastructure. It’s a way to fix capitalism’s other bad habit of perpetuating class privileges from one generation to the next. Unlike feudalism, which was based on hereditary aristocracy, capitalism is, in theory, a meritocracy, or at least a “luckocracy.” Players are supposed to have a fair, if not equal, chance to succeed. Winners are supposed to be determined by hard work, talent, and luck, rather than by accident of birth. Yet, as we’ve seen, Capitalism 2.0 falls far short of this ideal.

The Children’s Opportunity Trust would give every child, as a birthright, an infusion of start-up capital — a kind of Social Security for the front end of life. The trust’s revenue would come from end-of-life repayments, as explained in chapter 7. This funding mechanism, I believe, is better than taking money from the general treasury. It directly links start-up help from society with an end-of-life obligation to repay, creating a kind of temporal commons that connects arriving and departing generations.

A spectrum or airwaves trust would have a distinct mission: to reduce the influence of corporations on our democracy. Its economic and ecological impacts could be significant (reducing corporate political influence will improve many policies), but they’re secondary to the political objective.

According to a study by the New America Foundation, the market value of the airwave licenses we’ve given free to corporate broadcasters is roughly $500 billion. It’s possible this value will decline as unlicensed wi-fi spreads, but meanwhile broadcasters sell our airwaves to advertisers and reap billions that belong, at least in part, to all of us.

Part of that money comes from political candidates who must purchase TV and radio ads to get elected. The problem isn’t so much the unearned windfall broadcasters collect; rather, it’s the fact that candidates are compelled to pay it to them. That makes politicians kowtow to corporate donors in order to pay broadcasters. Other democracies give free airtime to political candidates, but we protect the broadcasters’ lock on our airwaves. By privatizing our airwaves, in other words, we’ve effectively privatized our democracy. The job of a spectrum trust would be to take back our democracy by taking back our airwaves.

This could be done in a couple of ways. One wouldn’t require an actual trust: Congress could simply say that, in exchange for free spectrum licenses, broadcasters must give a certain amount of free airtime to political candidates. Alternatively, broadcasters could pay for their licenses, with revenue going to a nonpartisan trust. That trust would allocate funds to candidates for the purchase of TV and radio ads; the allocation formula would take account of cost differences between media markets and other relevant variables. Neither of these approaches would prevent corporations from lobbying or contributing to candidates’ other expenses, but they would level the political playing field by greatly reducing the sums candidates have to raise to get elected.

Some commons trusts will generate income from the sale of usage permits. Many others will need income to acquire property rights, restore degraded habitat, or give children start-up capital. It’s therefore essential to encourage a multiplicity of revenue sources. The best way to do this is through a federal commons tax credit.

When I was in the solar energy business during the 1970s, our customers benefited from a combination of federal and state solar tax credits. As I frequently explained then, a tax credit isn’t the same as a tax deduction — it’s bigger. A deduction is subtracted from the amount of income subject to tax; if your marginal tax rate is 30 percent, a tax deduction saves you thirty cents on the dollar. By contrast, a tax credit is subtracted from the amount of taxes you pay, regardless of your tax bracket. If you owe taxes, it always saves you one hundred cents on the dollar.

The premise behind a commons tax credit is that wealthy Americans owe more to the commons than they currently pay to the government in taxes. That being so, a commons tax credit would work like this. The federal government would raise the uppermost tax bracket by a few percentage points. At the same time, it would give affected taxpayers a choice: pay the extra money to the government, or contribute it to one or more qualified commons trusts. If people do the latter, they get a 100 percent tax credit, thereby avoiding additional taxes. The message to the wealthy thus is: You have to give back more. Whether you give it to the IRS or directly to the commons is up to you. If you want to eliminate the government middleman, that’s fine.

What qualifies as a commons trust? It’s a trust that either benefits all citizens more or less equally or collects money to restore an endangered commons. Social Security, the American Permanent Fund, the Children’s Opportunity Trust, and most land and watershed trusts, would qualify. By contrast, a normal charity would not.

Contributions to normal charities would remain deductible from taxable income, but not from taxes owed. ... read the whole chapter


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Wealth and Want
... because democracy alone hasn't yet led to a society in which all can prosper