Product Description

From the cofounder of Working Assets comes a visionary plan to upgrade capitalism.

Product Details

• Amazon Sales Rank: #52104 in Books
• Published on: 2006-11-01
• Original language: English
• Number of items: 1
• Binding: Hardcover
• 195 pages

From the Publisher
FROM THE LOS ANGELES TIMES,
January 5, 2007
By Lee Drutman

PETER BARNES is a businessman in a quandary. He's a firm believer in free markets, but he's also convinced that our current version of resource-depleting, pollution-spewing capitalism is pushing nature ever closer to collapse -- and generating a gaping divide between rich and poor that increasingly defies all conceptions of fairness.

Yet Barnes is no fan of government either. It's too susceptible to corporate pressure to be effective, he argues, and besides, do we really want politicians setting prices?

The co-founder and former president of Working Assets Long Distance, a telephone service that donates to nonprofit organizations, thinks he has a better idea: Establish an independent "common wealth" sector to protect shared assets like air and water, and maybe even cultures and communities. Secure these assets in a trust that belongs to everyone, he writes in "Capitalism 3.0," and profit-making corporations couldn't wantonly gobble them up. Plus, everybody would benefit equally from their use. If it sounds farfetched, maybe that's the point: "We ignore common wealth because it lacks price tags and property rights," warns Barnes, who already has incorporated a nonprofit organization called the Sky Trust to protect the atmosphere.

Barnes' tale of capitalism gone mad begins with the Industrial Revolution, when the primary social problem was a scarcity of goods and the primary economic problem was coordinating limited investment capital. Land and natural resources, by contrast, appeared endless. Hence, what he calls Capitalism 1.0 developed with rules and practices that privileged capital above all else, particularly the joint-stock corporation.

By 1950, scarcity was no longer a problem. But the great engines of capitalism, already programmed to maximize production and profitability, were incapable of slowing down. Instead, they entered a new phase Barnes calls Capitalism 2.0. Instead of filling human and social needs, he writes, they began creating what Dr. Seuss' villain in "The Lorax" calls "thneeds," things we didn't know we needed. Worse, corporations continue to impose their "illth," British critic and author John Ruskin's word for goods produced by an economy that don't contribute to human welfare, on a natural environment whose capacity for absorbing is far less boundless that previously thought.

Barnes is at his best in diagnosing the structural maladies in today's iteration of capitalism, which has created a "world is awash with capital, most of it devoted to speculation" but "healthy ecosystems are increasingly scarce." The main problem, as he sees it, has to do with the three algorithms that drive market behavior: Maximize return to capital; distribute property income on a per-share basis, and the value, or price, put on nature is zero. And, he notes, 5% of the world's people control half the property shares.

The obvious moral of "The Lorax" parable, in which the evil Once-ler cuts down all the truffula trees to make thneeds, Barnes says, is that "trees need property rights too." If the trees belonged to everyone, held in trust, their price would not be zero -- the Once-ler would have to pay (and the trust would be responsible for protecting the trees from extinction). Such a set-up, the author argues, would not only protect nature, but also allow everyone (not just the wealthy) to benefit equally from its occasional use. If such a plan were implemented properly, this would be what Barnes calls "Capitalism 3.0," in which "[w]e'll have more things we truly need -- healthier ecosystems, communities, culture -- and fewer thneeds."

Barnes' new and improved capitalism is more an exploration than a detailed plan. Even if the details prove unworkable (and they may very well), he deserves plaudits for offering a way past the stale debates of statism versus privatization. Instead of chiding greedy capitalists and venal politicians, perhaps we ought to look more closely at the rules and incentives to which they are duly bound to respond. And perhaps in doing so we will discover something new right under our noses.

About the Author
Peter Barnes is a successful entrepreneur who has started and run several socially responsible businesses. Most recently he was a co-founder and president of Working Assets Long Distance. In 1995 he was named Socially Responsible Entrepreneur of the Year for Northern California. He is also a former journalist who has written for Newsweek, The New Republic, The New York Times and many other publications.

Customer Reviews

A Brilliant Overview of the Commons and Economics
Peter Barnes does a masterful job in re-imagining economics to take account of the commons, the shared resources that we inherit together and must pass along undiminished to our children. This book is lucid and highly readable as it deconstructs key flaws in conventional economics and proposes innovative solutions that protect the commons. Barnes is a former businessman (cofounder of Working Assets) and journalist, so he approaches the subject with sophistication and clarity.

Barnes notes, for example, that conventional economics typically fails to account for the hidden subsidies that companies take from the commons (air, water, spectrum, public lands, federal R&D, etc.). Companies also use the commons as a convenient place to "externalize" their wastes, social disruptions and other costs. Barnes suggests some new legal and institutionl strategies -- such as stakeholder trusts -- as ways to harness market forces while preserving our "common wealth." This book is succinct, profound, idealistic and practical.

Coherent and Simple, Not the Whole Story
I concur with all the 5 star reviews with respect to this book presenting a vision for the next level of capitalism nurturing the commons rather than destroying it, but it is not the whole story. It is simple without being simplistic, but the terms "ecological economics" (see my reviews of books by Herman Daly) and "natural capitalism (see my reviews of books by Paul Hawken) are not an integral part of this story. Neither is public philosophy, although the author clearly has an ethical public policy of his own.

Like the work of Paul Hawken, Amory Lovins, Hunter Lovins, and Herman Daly, it does not accuse nor seek repatriation of benefits as much as it seeks to educate and demonstrate why respect for the commons is good for business.

I recommend Michael Sandel's "Public Philosophy: Essays on Morality in Politics," and Paul Hawken's "The Ecology of Commerce," in addition to this book, but those deeply interested in this topic might wish to expand their range by browsing some of my lists on democracy, capitalism, and security.

The book ends with numerous ideas, some easy to implement, like time banks (I see a rush to displace banks, money, credit, and interest coming down the pike), and some more difficult but essential, such as reversing the spectrum licenses and land licenses awarded to corporations under Capitalism 1.0, and putting those resources to work for all of the people.

The author spends some time noting that government is not the complete answer, and I not only agree, I am eagerly waiting for a book called Government 3.0 or Democracy 3.0, something that brings together the diverse literature on the need to localize agriculture and energy again, stop the global corporations, e.g. Wal-Mart, from destroying communities, and restore integrity and trust in human transactions. In a sense, this book is a model that could be applied to other areas in need of revitalization.

Public Philosophy: Essays on Morality in Politics
The Ecology of Commerce
Ecological Economics: Principles And Applications
Natural Capitalism: Creating the Next Industrial Revolution
Blessed Unrest: How the Largest Movement in the World Came into Being and Why No One Saw It Coming
Wal-mart: The High Cost of Low Price
Wal-Mart: The High Cost of Low Price

The Beginnings of a Conceptual Framework for a New Economic System
I have just read Capitalism 3.0 by Peter Barnes and am very impressed. Peter is a Georgist of the US variety although that fact is not immediately apparent as the book is written in a very light, non-ideological, non academic style. It is an extremely accessible and well written case for 'the propertisation' of the commons - emphatically NOT 'privatisation'. It does not discuss land value taxes/rents directly but places them indirectly within the context of all commons and proposes a solution to 'the tragedy' of all commons that, followed through, would nevertheless deliver LVT and something like a citizens income.

Peter sees a need for a counterbalance to corporate power linked to private property, but not by State ownership and hence not by any measure that smacks of Socialism. Instead he puts forward the idea of many kinds of Trusts holding many kinds of commons property- from the GHG emisison rights to scientific knowledge to community land. Apart from the very essential job of supporting Commons Trusts and assigning property rights and legal protections to them, governments would thereafter stand aside. Governments would especially distance themselves from disbursing the receipts/rents/ licence fees collected for the use of the various commons as their susceptibility to corporate influence, according to Peter Barnes, is systemic and cannot be overcome. It is a very American approach - rather than intervening directly to regulate the power of an damaging but essential force, a countervailing force is introduced to dynamically re balance the system. A global Trust would be required to protect the atmosphere but this would not be given political power per se - but it would have significant economic power to balance the existing private sector influence of the WTO.

This solution would satisfy libertarian, free market thinkers as it would not enhance the role of the State any more than that which it currently plays. Indeed many regulations would become unnecessary as social, cultural and environmental welfare would be intrinsically factored into ordinary business decisions.

Of course all of this fits conceptually very nicely into the work Feasta has been doing for a Cap and (equal per capita) Share of green house gas emission rights. See www.capandshare.org for an update. What I think the idea really needs is another book entitled 'Socialism 3.0' that says more or less the same thing but from a European perspective. Together they could bookend a conceptual framework for an Earth and human friendly new economic system.