Capitalism 3.0

 

I’ve just finished reading Peter Barnes work Capitalism 3.0. I’ve been going very slowly through it because while short and accessible the ideas contained therein are really brilliant (imo). (h/t to Mark Satin for introducing me to the book).

You can read the book in pdf form (onthecommons.org/files/Capitalism_3.0_Peter_Barnes.pdf Or Google Capitalism 3.0, it’s the third hit from the top).

Also the blog and the book site. Here is a Barnes lecture on sky permits.

Barnes more than any other I’ve read (minus the dead end of Marxism or Neo-Keynesianism) goes to the core of Capitalism’s DNA to argue that it is built to do what it is built to do (through corporations, make profits) and therefore not able (structurally) to take interest in the environment, future generations, etc.

One reason I think this is so key is that while well-intentioned, the whole concepts of Enlightened Business or Socially Responsible Investing (SRI), and/or Conscious Capitalism really don’t make the kind of transformative effects they otherwise desire. You can only make the system so moral, but individual conscious CEOs are not going to change the heart of the issue. For it is structural, legal, and political in nature.

He then argues for a system of propertization (not privatization). The two major US political parties are controlled by failed systems of thinking. The Republicans by privatization–which forces “externalization” of costs to the environment, public health, standards of living. And the Democrats by statist governmentalisation. All of the classic critiques of big government (from Hayek on) then come into play.

If capitalism is built on property rights–as libertarians always are wont to remind us–then Barnes has an ingenious idea. Create air, water, natural resources as property—BUT (and here is the key) not as private property. But as citizenry property held in trust. Not held by governmental taxes and largesse.

Barnes lays this vision out in the video. Create a Carbon Cap (decreasing 2% per annum), then sell (trade) the auctions for use of pollution emitting permits. This will also signal to the market to move to post-carbon sources of energy. Ok, so far this standard on the left. But the last step is the key. The profits do not go to the government but rather as dividends paid out equally to every citizen. (Like in Alaska where oil profits held in trust, a portion of those profits goes to each resident of Alaska).

What this points back to is the foundation of economics (Adam Smith). Smith was originally a moral philosopher (economics was considered a branch of moral and political philosophy). With the routinization and mathematicization of economics in the 19th and then into the 20th century, economics become subject to a reductionist instrumentalist reason and worldview, thereby denying the importance of a key insight of Smith’s. Smith said that the society, freely, should choose to set aside a number of areas of life to not be subject to the market force. Competition, the ethos of the market, is fine within the market, but it (structurally) isn’t appropriate as was stated earlier to the issue of resource base, public lands, etc.

Smith called these aspects set aside (by consensual choice) by the citizenry the commons. The commons has no political voice. The left wants increased governmental control. The right wants control by elite business interests.

The key is to identify and monetize and then propertize and entrust the commons wealth, which otherwise are used by private business interests without paying for the right to use common property.  e.g. Legal system, airwaves, air, and so forth.

(Image here)