Capitalism 3.0: for a market that takes nature into account; and how to use new types of commons-type institutions, such as trusts, to achieve this.

---

Product Description

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

---

Product Details

• Amazon Sales Rank: #139886 in Books
• Published on: 2006-11-01
• Format: Illustrated
• 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

Best blueprint I've seen for restoring sanity to capitalism.
Barnes does a terrific job laying out a blueprint for dealing with the amazingly complex system we call capitalism today, a plan for curing many of the dysfunctions driving us into an imperilled future. I love the special sections addressing all the players at the end. Now we need to rebuild the system so it sustains human live for future generations. We have the framework thanks to Barnes. Now we must build the finished product...like volunteers for Habitat for Humanity it is time for all of us to pick up a tool and get work, wherever we are, whatever we are doing.

My own work deals with shifting the paradigm from which we think. But structures still need to change so they are aligned with the new consciousness. This book is a great start.

Thank you, Peter Barnes!!

John Renesch, author, Getting to the Better Future

Broadening the Ownership of Capital
"Capitalism 2.0" names the problem that needs solving: our economic system that relies on increasing consumption. It is destroying nature, widening the gap between the few very rich and the many very poor, and failing to increase our happiness. Peter shows that the solution will not come from government, because it is controlled by the persons causing the problem. Corporate shareowners are also dismissed as a source of change.

The book's subtitle is "A Guide to Reclaiming the Commons." The "commons" means all the tangible or intangible "things" that do not belong to an individual, a corporation or other private entity. The commons belong equally to all individuals, including future generations. Over the centuries, many things that once were in the commons have been taken as private property or used for private purposes. The rest of us lose when a part of the commons is taken, such as with land and the airwaves. We also lose when the commons are used for private purposes, such as the use of air and water to dispose of waste.

What his book proposes, the "Capitalism 3.0" of its title, is that individual trusts be created to hold each element of the commons. The trustees would not only protect the trust property for future generations but they would also collect fees for its use and distribute them as dividends to all U.S. residents. The aggregate of the distributions from all these trusts could be enough to bring everyone above the poverty level.

I believe there is a missed opportunity in Peter's argument against a solution coming from shareowner action. He shows that existing shareowners routinely vote with management. What is missing is how that ownership structure could be changed, especially for younger businesses that are most likely to seek profitable new ways to solve social issues. Our own work is in broadening the ownership of business and in building a more direct relationship between the owners and their stewards in management. Peter places capitalism and community in conflict. He suggests the trusts of commons as a way to serve the community, leaving capitalism to service individual acquisition and consumption. We believe that businesses can market their ownership to their own communities, resulting in both service to the community and an investment return to the individual shareowners.

Capitalism 3.0 is a clear, well-thought-out analysis of the problems and a plan for protecting our world and society for future generations, while alleviating poverty.
Drawing upon John Rawls A Theory of Justice, Peter proposes the "predistribution of property," to provide more people with a source of income, rather than the redistribution of income that is practiced through taxation and welfare. However, predistributing assets into trusts means interposing an elite class to take care of the rest of us. The trustees would manage the commons, for the benefit of humans and other creatures now and for all time to come. Those of us being protected would have no direct participation in making policy or running the operations.

Good ideas, poorly written
There are some great ideas in this book and it is highly educational. However it seems like it could have really used a solid editor. First off, the running metaphor of capitalism and operating systems is just plain dumb, maybe it's because I am a software guy, but I just find it distracting. It lowers the authors cred.

Another gripe is that the book doesn't linearly develop an argument. It moves from high level 'wouldn't it be great ifs' to details and then back and forth repeatedly.

Sigh...