We hear a great deal today about the "Ownership Society" and privatizing functions that have traditionally been government activities. We don't hear much about the Commons any more, but that doesn't mean it has gone away, or is any less valid a concept in 21st century America — and 21st century Planet Earth — than it was 100, 200, 300 years ago. Some things are rightly private property, and others are rightly common property. But most of us don't look closely at it — and most of us are net losers as a result.

 

Mason Gaffney: George's Economics of Abundance: Replacing dismal choices with practical resolutions and synergies

Charles B. Fillebrown: A Catechism of Natural Taxation, from Principles of Natural Taxation (1917)

Q5. What is meant by equal right to land?
A. The right of access upon equal terms -- preference to be secured only upon payment of a premium that will extinguish the equal rights of all other men.

Q6. What is meant by a joint or common right to land?
A. A joint or common right to the rent of land -- a right such as heirs-at-law have to share the income of or rent of an estate. ... read the whole article

Mason Gaffney: Land as a Distinctive Factor of Production

Frank Stilwell and Kirrily Jordan: The Political Economy of Land: Putting Henry George in His Place

Georgism has a distinctive ethical basis. So a review of the contemporary relevance of Georgist political economy can usefully begin by making this explicit. The key moral issue is the private appropriation of public wealth. As George recognised, land is a ‘gift from nature’ and, as such, is rightfully a community resource. Hence, those deriving benefits from the private ownership of land should recompense the community for the privilege. This principle has strong echoes of the idea of ‘usufruct’, a pre-capitalist term denoting a person’s legal right to use and accrue benefits from property that does not belong to them. In return, the user is obliged to keep the property in good repair and pay all costs as a ‘ground rent’ (‘Lectric Law Library, n.d). The concept of ‘usufruct’ has fallen out of common usage, so one hesitates to try to revive it. Moreover, as Richards (2002) notes, ‘it is difficult to image how this word could be employed, or brought back into circulation, in the modern world, since we live in a world in which people tend to be remarkably unsympathetic to the property rights or claims of others’.

However, the principle of ‘usufruct’ goes to the heart of the question of how best to balance collective and individual rights and interests. George’s solution of a tax on the value of land squarely addresses this issue. By returning a proportion of the land value to the community in the form of taxation revenue, restitution would be paid for the use of a community resource. This is an ethical justification for land taxation. ... read the whole article

Bill Batt: The Compatibility of Georgist Economics and Ecological Economics

Hence it becomes important, critically important, to understand the meaning of “ownership” and “property” in the Georgist lexicon. But it is not difficult, for they continue to have their classical meanings, just as for John Locke, Adam Smith, and all the major forerunners and thinkers of classical economics until the advent of neoclassical economics. What was the meaning of ownership and property in their classical sense? Property was the product of human labor and capital, and that alone. Items of property were household goods, personal attire, armaments, and similar such goods. Property belonged in the category of capital. Land was not part of property, but rather was its own category. Land, broadly defined, belonged to everyone and was the common heritage of all humanity.15 One could no more “own” land than one could own water, air, or other parts of nature, at least in the sense of ownership that people often use today. Much like the native-American concept of ownership, it was part of what was classically called “the commons.” 16 “What is this you call property?” Massasoit, a leader of the Wampanoag, asked the Plymouth colonists whom he had befriended in the 1620s. “It cannot be the earth, for the land is our mother, nourishing all her children, beasts, birds, fish, and all men. The woods, the streams, everything on it belongs to everybody and is for the use of all. How can one man say it belongs to him?” 17 Indeed Georgists see a moral equivalency between monopoly ownership of land and nature and the ownership of slaves! ...

POINTS OF SYNTHESIS OF GEORGIST AND ECOLOGICAL ECONOMICS
The commonalities of Georgist economics and ecological economics appear to be organizable into six general points:

1) preservation of the commons,
2) sustainable development,
3) appropriate valuation of natural capital,
4) ensuring social and biological community,
5) fostering individual self-realization, and
6) securing economic justice.

Implicit in all these points is the view that market activity needs to be circumscribed and juxtaposed to the non-human, biological realm. It appears that there is lots to be gained by some synthesis of the two fields of discourse.

Ecological economists worry about the encroachment, and even the elimination, of those elements of nature to which private property title has not been granted. In their concern about the need to protect the “commons,” they are torn between the view that only through privatization can all the world’s assets be preserved and the alternative view that any private appropriation of the commons constitutes a moral compromise. They fear a repeat of Garrett Hardin’s “tragedy of the commons.” Their argument often proposed is rather complex to explicate: it assumes that private property titles may perhaps provide the best incentive not to exploit the fruits of the earth and the earth itself.126 To Georgists, on the other hand, the earth and all its resources are already in fact the birthright of all humanity; individuals are entitled to its use in return for the payment of rents. Further privatization is anathema. The key rather is in distinguishing the various components of ownership and getting prices right— mainly in the collection of economic rents.... read the whole article

Judge Samuel Seabury: An Address delivered upon the 100th anniversary of the birth of Henry George

WE are met to celebrate the 100th anniversary of the birth of Henry George. We meet, therefore, in a spirit of joy and thanksgiving for the great life which he devoted to the service of humanity. To very few of the children of men is it given to act the part of a great teacher who makes an outstanding contribution toward revealing the basic principles to which human society must adhere if it is to walk in the way which leads to freedom. This Henry George did, and in so doing he expressed himself with a clarity of thought and diction which has rarely been surpassed.

... Indeed, if we try to envision, in view of our present location this afternoon, "The World of Tomorrow," I have no hesitation in saying that if the world of tomorrow is to be a civilized world, and not a world which has relapsed into barbarism, it can be so only by applying the principles of freedom which Henry George taught. The principles to which I refer are:

First, that men have equal rights in natural resources, and that these rights may find recognition in a system which gives effect to the distinction between what is justly private property because it has relation to individual initiative and is the creation of labor and capital, and what is public property because it is either a part of the natural resources of the country, whose value is created by the presence of the community, or is founded upon some governmental privilege or franchise.

Henry George believed in an order of society in which monopoly should be abolished as a means of private profit. The substitution of state monopoly for private monopoly will not better the situation. It ignores the fact that even where a utility is a natural monopoly which must be operated in the public interests, it should be operated as a result of cooperation between the representatives of labor, capital. and consumers, and not by the politiciaps w'ho control the political state.

We should never lose sight of the fact that all monopolies are created and perpetuated by state laws. If the states wish seriously to abolish monopoly, they can do so by withdrawing their privileges; but they cannot grant the privileges which make monopoly inevitable and avoid the consequences by invoking anti-trust laws against them.

It is strange that the state, which has assumed all sorts of functions which it cannot with advantage perform, still persists in neglecting a vital function which it should and can perform — the function of collecting public revenues, as far as possible, from those who reap the benefits of natural resources. In view of public and social needs, it is remarkable that no effort has been made by governments to reduce the tax burdens on labor and capital, which are engaged in increasing production, by transferring them to those who restrict production by making monopoly privileges special to themselves.

These monopolistic privileges are of course disguised under many different forms, but the task of ascertaining what they are, and their true value, is a task within the competency of government if it really desires to accomplish it. ... read the whole speech

Peter Barnes: Capitalism 3.0 — Chapter 1: Time to Upgrade (pages 3-14)

When most people think of the commons, they imagine a pasture where animals graze. That’s an antiquated notion, and not what I have in mind. In this book I use the commons as a generic term, like the market or the state. It refers to all the gifts we inherit or create together.

This notion of the commons designates a set of assets that have two characteristics: they’re all gifts, and they’re all shared. A gift is something we receive, as opposed to something we earn. A shared gift is one we receive as members of a community, as opposed to individually. Examples of such gifts include air, water, ecosystems, languages, music, holidays, money, law, mathematics, parks, the Internet, and much more.

These diverse gifts are like a river with three tributaries: nature, community, and culture (see figure 1.1). This broad river precedes and surrounds capitalism, and adds immense value to it (and to us). Indeed, we literally can’t live without it, and we certainly can’t live well.

There’s another quality to assets in the commons: we have a joint obligation to preserve them. That’s because future generations will need them to live, and live well, just as we do. And our generation has no right to say, “These gifts end here.” This shared responsibility introduces a moral factor that doesn’t apply to other economic assets: it requires us to manage these gifts with future generations in mind. Markets don’t naturally do this. If an asset yields a competitive return to capital, markets keep it alive; otherwise, they let it die. No other factors matter.

Assets in the commons are meant to be preserved regardless of their return to capital. Just as we receive them as shared gifts, so we have a duty to pass them on in at least the same condition as we received them. If we can add to their value, so much the better, but at a minimum we must not degrade them, and we certainly have no right to destroy them.

Besides the commons, I use a few similar-sounding terms that should be clarified here as well.

• By common wealth I mean the monetary and nonmonetary value of all the assets in the commons. Like stockholders’ equity in a corporation, it may increase or decrease from year to year depending on how well the commons is managed.
• By common property I mean a class of human-made rights that lies somewhere between private property and state property. Like private property, common property arises when the state recognizes it. Unlike private property, it’s inclusive rather than exclusive — it strives to share ownership as widely, rather than as narrowly, as possible.
• By the commons sector I mean an organized sector of our economy. It embraces some of the gifts we inherit together, but not all. In effect, it’s a subset of the given commons that we consciously organize according to commons principles. It’s small at the moment, but the point of this book is that we should enlarge it.... read the whole chapter

Peter Barnes: Capitalism 3.0 — Chapter 2: A Short History of Capitalism (pages 15-32)

In the beginning, the commons was everywhere. Humans and other animals roamed around it, hunting and gathering. Like other species, we had territories, but these were tribal, not individual. ...

Why did this happen? There are many explanations. One is that welfare kept the poor poor; this was argued by Charles Murray in his 1984 book Losing Ground.Welfare, he contended, encouraged single mothers to remain unmarried, increased the incidence of out-of-wedlock births, and created a parasitic underclass. In other words, Murray (and others) blamed victims or particular policies for perpetuating poverty, but paid scant attention to why poverty exists in the first place.

There are, of course, many roots, but my own hypothesis is this: much of what we label private wealth is taken from, or coproduced with, the commons. However, these takings from the commons are far from equal. To put it bluntly, the rich are rich because (through corporations) they get the lion’s share of common wealth; the poor are poor because they get very little.

Another way to say this is that, just as water flows downhill to the sea, so money flows uphill to property. Capitalism by its very design maximizes returns to existing wealth owners. It benefits, in particular, those who own stock when a successful company is young; they can receive hundreds, even thousands of times their initial investments when the company matures. Moreover, once such stockholders accumulate wealth, they can increase it through reinvestment, pass it on to their heirs, and use their inevitable influence over politicians to gain extra advantages — witness the steady lowering of taxes on capital gains, dividends, and inheritances. On top of this, in the last few decades, has been the phenomenon called globalization. The whole point of globalization is to increase the return to capital by enabling its owners to find the lowest costs on the planet. Hence the stagnation at the bottom alongside the surging wealth at the top. ... read the whole chapter

Peter Barnes: Capitalism 3.0 — Chapter 5: Reinventing the Commons (pages 65-78)

Everyone knows what private wealth is, even if they don’t have much of it. It’s the property we inherit or accumulate individually, including fractional claims on corporations and mutual funds. In the United States in 2005, this private wealth (minus mortgages and other liabilities) totaled $48.5 trillion. As previously noted, the top 5 percent of Americans owns more of this treasure than the bottom 95 percent.

But there’s another trove of wealth that’s not so well-known: our common wealth. Each of us is the joint recipient of a vast inheritance. This shared inheritance includes air and water, habitats and ecosystems, languages and cultures, science and technologies, social and political systems, and quite a bit more.

Common wealth is like the dark matter of the economic universe — it’s everywhere, but we don’t see it. One reason we don’t see it is that much of it is, literally, invisible. Who can spot the air, an aquifer, or the social trust that underlies financial markets? The more relevant reason is our own blindness: the only economic matter we notice is the kind that glistens with dollar signs. We ignore common wealth because it lacks price tags and property rights. ...

Organizing Principles of the Commons Sector

Property rights, especially the common kind, require competent institutions to manage them. What we need today, then, along with more common property, is a set of institutions, distinct from corporations and government, whose unique and explicit mission is to manage common property.

I say set of institutions because there will and should be variety. The commons sector should not be a monoculture like the corporate sector. Each institution should be appropriate to its particular asset and locale.

Some of the variety will depend on whether the underlying asset is limited or inexhaustible. Typically, gifts of nature have limited capacities; the air can safely absorb only so much carbon dioxide, the oceans only so many drift nets. Institutions that manage natural assets must therefore be capable of limiting use. By contrast, ideas and cultural creations have endless potential for elaboration and reuse. In these commons, managing institutions should maximize public access and minimize private tollbooths.

Despite their variations, commons sector institutions would share a set of organizing principles. Here are the main ones.

• LEAVE ENOUGH AND AS GOOD IN COMMON As Locke argued, it’s okay to privatize parts of the commons as long as “enough and as good” is left for everyone forever. Enough in the case of an ecosystem means enough to keep it alive and healthy. That much, or more, should be part of the commons, even if parts of the ecosystem are private. In the case of culture and science, enough means enough to assure a vibrant public domain. Exclusive licenses, such as patents and copyrights, should be kept to a minimum.

• PUT FUTURE GENERATIONS FIRST Corporations put the interests of stockholders first, while government puts the interests of campaign donors and living voters first. No one at the moment puts future generations first. That’s Job Number One for the commons sector.

In practice, this means trustees of common property should be legally accountable to future generations. (We’ll see how this might work in chapter 6.) They should also be bound by the precautionary principle: when in doubt, err on the side of safety. And when faced with a conflict between short-term gain and long-term preservation, they should be required to choose the latter.

• THE MORE THE MERRIER Whereas private property is inherently exclusive, common property strives to be inclusive. It always wants more co-owners or participants, consistent with preservation of the asset.

This organizing principle applies most clearly to commons like culture and the Internet, where physical limits are absent and increasing use unleashes synergies galore. It also applies to social compacts like Social Security and Medicare, which require universal participation. In these compacts, financial mechanisms express our solidarity with other members of our national community. They’re efficient and fair because they include everybody. Were they to operate under profit-maximizing principles, they’d inevitably exclude the poor (who couldn’t afford to participate) and anyone deemed by private insurers to be too risky.

• ONE PERSON, ONE SHARE Modern democratic government is grounded on the principle of one person, one vote. In the same way, the modern commons sector would be grounded on the principle of one person, one share. In the case of scarce natural assets, it will be necessary to distinguish between usage rights and income rights. It’s impossible for everyone to use a limited commons equally, but everyone should receive equal shares of the income derived from selling limited usage rights.
• INCLUDE SOME LIQUIDITY Currently, private property owners enjoy a near-monopoly on the privilege of receiving property income. But as the Alaska Permanent Fund shows, it’s possible for common property co-owners to receive income too.

Income sharing would end private property’s monopoly not only on liquidity, but also on attention. People would notice common property if they got income from it. They’d care about it, think about it, and talk about it. Concern for invisible commons would soar.

Common property liquidity has to be designed carefully, though. Since common property rights are birthrights, they shouldn’t be tradeable the way corporate shares are. This means commons owners wouldn’t reap capital gains. Instead, they’d retain their shared income stakes throughout their lives, and through such stakes, share in rent, royalties, interest, and dividends. ... read the whole chapter

Peter Barnes: Capitalism 3.0 — Chapter 10: What You Can Do (pages 155-166)

To build Capitalism 3.0, we each have unique roles to play. I therefore address the final pages of this book to a variety of people whose participation is critical. ...

COMMONS ENTREPRENEURS

You’re going to change the world. You will build the new commons sector, one piece at a time. You’ll be the unsung, or modestly sung, heroes and heroines of Capitalism 3.0.

A commons entrepreneur, like a private entrepreneur, is a visionary, a catalyst, a starter. You see a need that isn’t being met, and a way to meet it. You bring people together, come up with a plan, and make it happen. Sometimes it works, sometimes it doesn’t. The difference is, a commons entrepreneur doesn’t get stock. You’re motivated by a different force, a desire to give back. You aren’t selfless; you enjoy success, recognition, and even money. But on balance, your desire to contribute to shared wealth outweighs your desire to accumulate private wealth. Accordingly, you choose the commons over the corporate sector.

A commons entrepreneur can work almost anywhere. Take a stroll around your neighborhood. What’s missing? A community garden? A bike path? A wi-fi hot spot? A food-buying club? Make it happen! Whether your interests relate to a river, a form of culture, or the planet, get involved. Adopt a commons. Learn everything about it. Fall in love with it. See who’s in charge. Then join or build an organization to revive it.

If you want a role model, consider Tim Berners-Lee, the inventor and promoter of the World Wide Web. Berners-Lee was a programmer at CERN, the European high-energy physics lab, when he had an idea to simplify the Internet through hypertext. Readers of an Internet page would simply click on a hypertext link and be transported automatically to another page, anywhere in the world. No more clunky protocols only geeks understand. Just one seamless information space, freely accessible to all.

Berners-Lee wrote the codes for Hypertext Transfer Protocol (HTTP) and Hypertext Markup Language (HTML). More importantly, he persuaded CERN to release them into the world with no patents, licenses, or other strings attached. This made it possible for anybody to adopt them without fear of lawsuits or ever having to pay a penny. Within a few years, the World Wide Web was ubiquitous. Berners-Lee then moved to MIT to lead an international consortium dedicated to preserving the Web as a nonproprietary space. At numerous points along the way, Berners-Lee could have started or joined a business, and in all likelihood he would have reaped millions. At each point, he declined. “I wanted to see the Web proliferate, not sink my life’s hours into worrying over a product release,” he explained. Making a contribution to the commons was more important to him than taking out a bundle for himself.

As a commons entrepreneur, your work is more difficult than your corporate counterpart’s. That’s because you’re treading in uncharted waters. The commons you seek to protect will probably lack property rights, and getting them can take years or decades. In fact, rounding up property rights will frequently be the first thing you do. That’s in addition to rounding up money, which is tough enough. Ultimately, you should strive to leave behind an institution that protects your beloved commons for generations to come. This is the measure of your success. ... read the whole chapter

Bill Batt: Comment on Parts of the NYS Legislative Tax Study Commission's 1985 study “Who Pays New York Taxes?”

The question still begs to be answered, “why tax land?” And what happens when we don’t tax land? Henry George answered this more than a century ago more forcefully and clearly, perhaps, than anyone has since. He recognized full well that the economic surplus not expended by human hands or minds in the production of capital wealth gravitates to land. Particular land sites come to reflect the value of their strategic location for market exchanges by assuming a price for their monopoly use. Regardless whether those who acquire title to such sites use them to the full extent of their potential, the flow of rent to such locations is commensurate with their full capacity. This is why John Stuart Mill more than a century ago observed that, “Landlords grow richer in their sleep without working, risking or economizing. The increase in the value of land, arising as it does from the efforts of an entire community, should belong to the community and not to the individual who might hold title.”33 Absent its recovery by taxation this rent becomes a “free lunch” to opportunistically situated titleholders. When offered for sale, the projected rental value is capitalized in the present value for purposes of attaching a market price and sold as a commodity. Yet simple justice calls for the recovery in taxes what is the community’s creation. Moreover, the failure to recover the land rent connected to sites makes it necessary to tax productive activities in our economy, and this leads to economic and technical inefficiency known as “deadweight loss.”34 It means that the economy performs suboptimally.

Land, and by this Henry George meant any natural factor of production not created by human hands or minds, is ours only to use, not to buy or sell as a commodity. In the equally immortal words of Jefferson a century earlier, “The earth belongs in usufruct to the living; . . . [It is] given as a common stock for men to labor and live on.”35 This passage likely needs a bit of parsing for the modern reader. The word usufruct, understood since Roman times, has almost passed from use today. It means “the right to use the property of another so long as its value is not diminished.”36 Note also that Jefferson regarded the earth as a “common stock;” not allotted to individuals with possessory titles. Only the phrase “to the living” might be subject to challenge by forward-looking environmentalists who, taking an idea from Native American cultures, argue that “we do not inherit the earth from our ancestors; we borrow it from our children.” The presumption that real property titles are acquired legitimately is a claim that does not withstand scrutiny; rather all such titles owe their origin ultimately to force or fraud.37

If we own the land sites that we occupy only in usufruct, and the rent that derives from those sites is due to community enterprise, it is not a large logical leap to argue that the community’s recovery of that rent should be the proper source of taxation. This is the Georgist argument: that the recapture of land rent is the proper – indeed the natural – source of taxation.38 ... read the whole commentary